Exhibit 10.1 - June 02 10-QSB
MASTER SUBORDINATION, WAIVER,
RELEASE AND INDEMNIFICATION
AGREEMENT
MARCH 27, 2002
TABLE OF CONTENTS
ARTICLE I Incorporation of Recitals...................................................................4
ARTICLE II Xxxxxx Loan; DMG Loan; Security.............................................................4
Section 2.01. Loans to Xxxxxx.............................................................................4
Section 2.02. Security....................................................................................4
ARTICLE III Subordination...............................................................................5
Section 3.01. Malin Group Loans Subordinated to Senior Indebtedness.......................................5
Section 3.02. No Payments with Respect to Subordinated Obligations........................................5
Section 3.03. Subordinated Obligations Subordinated to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization for the Benefit of Creditors of Xxxxxx...........6
Section 3.04. Subordination Rights Not Impaired by Acts or Omissions of Xxxxxx or Holders of Senior
Indebtedness................................................................................7
Section 3.05. Subordinated Obligations Subordinated to the DMG Loan and the Preferred Stock...............7
Section 3.06. Preferred Stock and DMG Loan................................................................8
ARTICLE IV Waiver of Subrogation.......................................................................8
Section 4.01. Waiver......................................................................................8
Section 4.02. Consideration...............................................................................9
ARTICLE V Release.....................................................................................9
Section 5.01. Release of Xxxxxx, et al....................................................................9
Section 5.02. Covenant Not To Xxx Released Parties........................................................9
Section 5.03. Release of SDS and the DMG Group...........................................................10
Section 5.04. Covenant Not To Xxx Section 5.03 Released Parties..........................................10
ARTICLE VI Indemnity..................................................................................10
ARTICLE VII Forebearance Not Forgiveness...............................................................10
ARTICLE VIII Miscellaneous..............................................................................10
Section 8.01. Non-petition...............................................................................10
Section 8.02. Margin Loans...............................................................................11
Section 8.03. Chief Executive Office.....................................................................11
Section 8.04. Governing Law, Jurisdiction, Consent to Service of Process.................................11
Section 8.05. Waiver of Jury Trial.......................................................................11
Section 8.06. Notices....................................................................................12
Section 8.07. Representations............................................................................13
Section 8.08. Further Assurances.........................................................................13
Section 8.09. Successors and Assigns.....................................................................14
Section 8.10. Severability...............................................................................14
Section 8.11. Counterparts...............................................................................14
EXHIBITS:
Exhibit A - Malin Group Loans
Exhibit B - Related Party Stock Ownership
Exhibit C - Xxxxxx Note
Exhibit D - Preferred Stock Details
Exhibit E - Preferred Shareholder Note
Exhibit F - Amendment to Preferred Stock
Exhibit G - Loan Details
Exhibit H - Intercreditor Agreement
Exhibit I - Software Security Agreement
Exhibit J - General Security Agreement
Exhibit K - Warrant
Exhibit L - Registration Rights Agreement
Exhibit M - Source Code Escrow Agreement
Exhibit N - Consulting Agreement
Exhibit O - Existing Liens Schedule
V&E DRAFT 4/04/02
MASTER SUBORDINATION, WAIVER,
RELEASE AND INDEMNIFICATION
AGREEMENT
This Master Subordination, Waiver, Release, and Indemnification
Agreement ("AGREEMENT") is entered into as of March 27, 2002 by and among Xxxxxx
Financial Services, Inc., a North Carolina corporation ("XXXXXX"), SDS Merchant
Fund, L.P., a Delaware limited partnership ("SDS"), DMG Legacy International
Ltd., a British Virgin Islands corporation ("INTERNATIONAL"), DMG Legacy
Institutional Fund LLC, a Delaware limited liability company ("INSTITUTIONAL
FUND"), DMG Legacy Fund LLC, a Delaware limited liability company ("FUND"), and
together with International and Institutional Fund, the "DMG GROUP"), X. X.
Xxxxxx Group Inc., a Delaware corporation ("Xxxxxx"), X.X. Xxxxxx, Inc., a New
York corporation ("XXXXXX, INC."), Xxxxxx Xxxxx ("RM"), Xxxxxx Xxxxx ("SM"),
Xxxxx Xxxxx ("LM"), Xxxx Xxxxxxxxx ("ES"), Xxxx Xxxxxxxx ("LF"), Xxxxxxx X.
Xxxxxx ("AH"), Xxxxxxx Xxxxxxx ("MW") and Xxxxxxx Xxxxx ("XXXXX" and
collectively with RM, SM, LM, ES, LF, AH and MW the "RELATED PARTIES"), and the
members of the Malin Group, as defined in Recital A below.
RECITALS
A.The corporations controlled by SM, RM, and LM listed on EXHIBIT A
attached hereto, and AH, ES, and SM individually (collectively, the "MALIN
GROUP") have each advanced funds to Xxxxxx, and Xxxxxx is obligated to such
person or entity for the principal amount, and for the accrued interest on such
principal amount, as set forth opposite such person`s or entity`s name on
EXHIBIT A attached hereto. The obligations of Xxxxxx to the Malin Group are
herein referred to collectively, as the "MALIN GROUP LOANS".
B. Each Related Party owns, directly or beneficially, the number of
shares of stock of Xxxxxx set forth opposite such Related Party`s name on
EXHIBIT B attached hereto.
X.Xxxxxx acts as clearing broker under that certain Fully Disclosed
Clearing Agreement, dated October 3, 1996, as amended by Amendment dated June 8,
1998 (the "CLEARING AGREEMENT") for Xxxxxx, Inc.
D.Prior to the date hereof, Xxxxxx made a loan to Xxxxxx, evidenced by
that certain promissory note dated January 31, 2002, in the original principal
amount of $500,000, which, together with interest thereon through the date
hereof in the amount of $6,041.67, has matured and is now due and owing (the
"ORIGINAL XXXXXX LOAN"). Xxxxxx contributed such funds to its broker-dealer
subsidiary, Xxxxxx, Inc., to meet certain reserve requirements of the National
Association of Securities Dealers.
X.Xx consideration of the undertakings and agreements of the other
parties hereto, Xxxxxx has agreed (i) to forebear from exercising its remedies
in respect of the Original Xxxxxx Loan and to extend the maturity date thereof
until June 18, 2002, and (ii) to lend Xxxxxx up to an additional $1,600,000 (the
"XXXXXX LOAN"), which will be applied in the manner set forth in the promissory
note evidencing the Xxxxxx Loan (the "XXXXXX NOTE") in the form of EXHIBIT C
attached hereto. The maturity date of the Xxxxxx Note shall be the later of June
18, 2002, and the date of demand by the holder thereof.
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F.Prior to the date hereof, SDS and the DMG Group were the owners of
the number of shares of Series A Convertible Preferred Stock ("PREFERRED STOCK")
of Xxxxxx, as set forth on EXHIBIT D attached hereto.
X.Xx consideration of the undertakings and agreements of the other
parties hereto, (i) the DMG Group has agreed to lend to Xxxxxx up to an
additional $900,000 (the "DMG LOAN") to be evidenced by a promissory note in the
form of EXHIBIT E attached hereto (the "DMG NOTE"), (ii) SDS has agreed to
transfer 70 shares of Preferred Stock to Xxxxxx Worldwide, Inc., a Delaware
corporation and the owner of all of the capital stock of Xxxxxx ("WORLDWIDE"),
and (iii) SDS and each member of the DMG Group have agreed to execute a Consent,
Waiver and Amendment to Series A Convertible Preferred Stock, a form of which is
attached as EXHIBIT F hereto (the "AMENDMENT TO PREFERRED STOCK") (A) to waive
certain breaches and defaults under the representations, warranties, covenants,
terms and conditions of the documents entered into in connection with the
issuance of the Preferred Stock, and (B) to make certain amendments to, or
waivers of, the provisions of the certificate of designation of the Preferred
Stock, all as set forth in such amendment.
X.Xxxxxx and the members of the DMG Group have advanced funds on or
before the date hereof (but in reliance on the substantially contemporaneous
execution and delivery of this Agreement and the Transaction Documents, as
defined below) in the amounts set forth in EXHIBIT G attached hereto. Xxxxxx and
the DMG Group will hereafter advance funds under the Xxxxxx Loan and the DMG
Loan on a pari passu basis, each in the proportion that its remaining commitment
as reflected on EXHIBIT G bears to the total unadvanced commitments as reflected
on EXHIBIT G.
I.Xxxxxx and the DMG Group have agreed to execute an intercreditor
agreement in the form of EXHIBIT H attached hereto (the "INTERCREDITOR
AGREEMENT"), providing, INTER ALIA, (i) for the priority of distribution of
certain funds received from Xxxxxx in respect of the Xxxxxx Loan, and the DMG
Loan, and (ii) the exercise of remedies in respect of the foregoing loans and
under the General Security Agreement, as defined in Recital N below.
X.Xxxxxx executed a software license agreement with E*TRADE Group, Inc.
("E*TRADE") in November 2000, as more particularly described in Xxxxxx`s Form
10-K/A filed with the Securities and Exchange Commission for the fiscal year
ended September 30, 2001, and has recently agreed with E*TRADE on the terms of
an amendment thereto (as amended, the "SOFTWARE LICENSE AGREEMENT"). Pursuant to
the Software License Agreement, Xxxxxx has granted E*TRADE a non-exclusive,
perpetual license on the software described in the Software License Agreement
(the "SOFTWARE") and E*TRADE has agreed to pay Xxxxxx the consideration more
particularly described in the Software License Agreement for such non-exclusive
license, including $2,000,000 cash upon acceptance of the Software by E*TRADE in
accordance with the Software License Agreement ("ACCEPTANCE").
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X. Xxxxxx borrowed $400,000 from New York Community Investment Company
L.L.C. ("NYCIC") in November, 1999, and secured such borrowing (the "NYCIC
LOAN") with substantially all of its assets and a negative pledge of assets.
X. Xxxxxx has agreed, in order to obtain NYCIC`s consent to the
Software Security Agreement and the General Security Agreement, as such terms
are defined below, and to obtain NYCIC`s waiver of its negative pledge on the
assets of Xxxxxx, (i) to apply $150,000 of the funds to be advanced pursuant to
the Xxxxxx Loan and the DMG Loan to repay a portion of the NYCIC Loan and (ii)
to grant NYCIC a security interest in the Software to secure the NYCIC Loan.
X. Xxxxxx has agreed, for the ratable benefit of Xxxxxx and NYCIC, to
secure (i) all amounts now owed or hereafter to become owing by Watley, Watley,
Inc. or any of their subsidiaries or affiliates to Xxxxxx or any of Xxxxxx`s
subsidiaries or affiliates (collectively, "XXXXXX DEBT"), including the Xxxxxx
Loan and the Original Xxxxxx Loan, and (ii) the NYCIC Loan pursuant to a
security agreement in the form of EXHIBIT I attached hereto (the "SOFTWARE
SECURITY AGREEMENT") covering, INTER ALIA, all of Xxxxxx`s rights in and to the
Software, subject to the Software License Agreement.
X. Xxxxxx has agreed, for the ratable benefit of the DMG Group and
Xxxxxx, to secure (i) the DMG Loan and (ii) the Xxxxxx Loan, pursuant to a
security agreement in the form of EXHIBIT J attached hereto (the "GENERAL
SECURITY AGREEMENT").
O. The Malin Group and the Related Parties have agreed to support the
repayment of the Xxxxxx Loan and the Original Xxxxxx Loan pursuant to the
subordination, waiver and indemnification provisions set forth in Articles III,
IV and VI of this Agreement.
P. The Malin Group has agreed (i) to support the repayment of the DMG
Loan and (ii) to grant certain superior rights to receive distributions in
respect of the Preferred Stock pursuant to the subordination provisions of this
Agreement applicable to the DMG Loan and the Preferred Stock.
X. Xxxxxx, the Related Parties, the Malin Group, the DMG Group, and
Xxxxxx have agreed that (a) all amounts received in respect of any of the
collateral covered by the Software Security Agreement shall be paid to Xxxxxx,
in respect of the Xxxxxx Debt (and shall not be paid to the DMG Group), and (b)
all amounts received in respect of any of the collateral covered by the General
Security Agreement shall be paid to Xxxxxx and the DMG Group ratably in the
proportions that (x) any remaining outstanding aggregate balance of the Xxxxxx
Loan (in the case of Xxxxxx) or (y) any remaining outstanding balance of the DMG
Loan (in the case of the DMG Group) bears to the sum of the amounts described in
clauses (x) and (y).
R. On the date hereof or substantially contemporaneously herewith,
Xxxxxx will issue a warrant in the form of EXHIBIT K attached hereto (the
"WARRANT"), to Worldwide, granting Worldwide the right to purchase 1,000,000
shares of common stock of Xxxxxx, as more fully set forth in the Warrant. Xxxxxx
will also execute a registration rights agreement, in the form of EXHIBIT L
attached hereto, to provide for the registration of the common stock to be
issued pursuant to the Warrant.
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X. Xxxxxx will deliver the source code for the Software to Xxxxxx
pursuant to a Source Code Escrow Agreement in the form of EXHIBIT M attached
hereto.
T. LF will provide consulting services to Xxxxxx in respect of the
source code for the Software pursuant to a Consulting Services Agreement in the
form of EXHIBIT N attached hereto.
U. Watley, Watley, Inc., the Related Parties, and the Malin Group will
be benefited by (i) Xxxxxx`s forebearance from accelerating the Original Xxxxxx
Loan and demanding repayment thereof, (ii) Xxxxxx`s advance of the Xxxxxx Loan
for the purposes described in the Xxxxxx Note, and (iii) the DMG Group`s advance
of the DMG Loan for the purposes described in the DMG Note.
V. SDS and/or the DMG Group will be benefited by (i) Xxxxxx`s
forebearance from accelerating the Original Xxxxxx Loan and demanding repayment
thereof, (ii) Xxxxxx`s advance of the Xxxxxx Loan for the purposes described in
the Xxxxxx Note, and (iii) the subordination provisions of this Agreement
relating to the DMG Loan and the Preferred Stock.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements and undertakings set forth herein and in the other agreements
executed in connection herewith (including without limitation the Clearing
Agreement previously executed) (collectively, the "TRANSACTION DOCUMENTS,") the
parties agree as follows:
ARTICLE I.
INCORPORATION OF RECITALS
The Recitals of this Agreement are incorporated herein as operative
provisions as if fully set forth in this Article I.
ARTICLE II.
XXXXXX LOAN; DMG LOAN; SECURITY
Section 0.00.XXXXX TO XXXXXX. Concurrently herewith (i) Xxxxxx has
executed the Xxxxxx Note, payable to the order of Xxxxxx, evidencing the Xxxxxx
Loan, and (ii) Xxxxxx has executed the DMG Note, payable to the order of the DMG
Group, evidencing the DMG Loan.
Section 0.00.XXXXXXXX.
(a) Concurrently herewith, Xxxxxx shall execute the Software
Security Agreement to secure (i) the Xxxxxx Loan, and (ii) the Original Xxxxxx
Loan.
(b) Concurrently herewith, Xxxxxx and Xxxxxx, Inc. shall
execute the General Security Agreement to secure, on a ratable basis, (i) the
DMG Loan and (ii) the Xxxxxx Loan.
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ARTICLE III.
SUBORDINATION
Section 3.01.MALIN GROUP LOANS SUBORDINATED TO SENIOR INDEBTEDNESS.
Xxxxxx and each member of the Malin Group agrees that the payments of the
indebtedness and other amounts to be paid by Xxxxxx in respect of the Malin
Group Loans (collectively, the "SUBORDINATED OBLIGATIONS") are fully
subordinated to the prior payment in full of all amounts owing to Xxxxxx under
the Original Xxxxxx Loan and the Xxxxxx Loan (the "SENIOR INDEBTEDNESS"). This
Article is intended for the benefit of all persons or entities who hold, or, in
reliance on the provisions of this Article, become holders of, or continue to
hold, any portion of the Senior Indebtedness ("HOLDERS"), and each such person
or entity shall be entitled to enforce such provision. No amendment or other
modification of the provisions of this Article shall be effective against any
Holder of Senior Indebtedness without the unanimous prior written consent of
such Holders.
Section 3.02 NO PAYMENTS WITH RESPECT TO SUBORDINATED OBLIGATIONS.
(a) RESTRICTION. Until the Senior Indebtedness is irrevocably
paid in full, no payment (whether of principal, interest, fees, or other
amounts) shall be made by Xxxxxx in respect of the Subordinated Obligations, and
no member of the Malin Group shall take any action to enforce its rights in
respect of, take any action towards the collection of, or accelerate, any
portion of the Subordinated Obligations, nor cancel, set off, or otherwise
discharge any part of the Subordinated Obligations.
(b) FUNDS RECEIVED HELD IN TRUST. If, notwithstanding the
provisions of this Section 3.02, Xxxxxx shall make any payment to any member of
the Malin Group on account of any part of the Subordinated Obligations, or if
any member of the Malin Group shall receive or retain any such payment at any
time when such payment is prohibited pursuant to this Section 3.02, then, such
payment shall be held by such member of the Malin Group in trust for the benefit
of, and shall be paid forthwith over and delivered to, the Holders for
application, first, to the payment of all amounts advanced in respect of the
Senior Indebtedness, until all Senior Indebtedness is paid in full in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the Holders.
(c) REINSTATEMENT. Notwithstanding anything to the contrary
herein contained, the provisions of this Article III and all obligations of each
member of the Malin Group hereunder shall continue to be effective or shall be
reinstated, as applicable, if at any time, payment of all or any portion of the
Senior Indebtedness or performance of any or all obligations to be performed by
Xxxxxx for any Holder are rescinded, invalidated, or otherwise required to be
restored or returned by any of the Holders pursuant to any bankruptcy law or
upon the insolvency, bankruptcy or reorganization of Xxxxxx or any member of the
Malin Group (or otherwise) all as though such payment or performance had not
been made. Without limiting the generality of the foregoing, if prior to any
such rescission, invalidation, declaration, restoration, or return, this
Agreement shall have been canceled or surrendered, this Agreement shall be
reinstated in full force and effect, and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise affect the
obligations of any member of the Malin Group in respect of the amount of the
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affected payment or application of proceeds (or any lien or collateral securing
such obligation).
(d) NOTICE. Xxxxxx shall give prompt written notice to the
members of the Malin Group of any default in respect of the Senior Indebtedness;
provided, however that the failure by Xxxxxx to provide such notice shall not
affect the rights of the Holders in any manner.
Section 3.03. SUBORDINATED OBLIGATIONS SUBORDINATED TO PRIOR PAYMENT OF
ALL SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION FOR THE
BENEFIT OF CREDITORS OF XXXXXX. At any general meeting of creditors of Xxxxxx or
in the event of any proceeding, voluntary or involuntary, for the distribution,
division, or application of all or part of the assets of Xxxxxx or the proceeds
of such assets, whether such proceeding be for the liquidation, dissolution, or
winding up of Xxxxxx or its business, a receivership, insolvency, or bankruptcy
proceeding, an assignment for the benefit of creditors or a proceeding by or
against Xxxxxx for extension or otherwise, if all the Senior Indebtedness has
not been paid in full at such time, the Holders of all Senior Indebtedness will
be irrevocably authorized at any such meeting or in any such proceeding (x) to
enforce claims in respect of the Subordinated Obligations in the name of Xxxxxx
by proof of debt, proof of claim, suit, or otherwise, and (y) to vote claims in
respect of the Subordinated Obligations, to accept or reject any plan of partial
or complete liquidation, reorganization, arrangement, composition, or extension.
Upon any distribution of assets of Xxxxxx in any dissolution, winding up,
liquidation or reorganization for the benefit of creditors of Xxxxxx (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise):
(i) the Holders of all Senior Indebtedness shall
first be entitled to receive payments in full of all Senior
Indebtedness (including without limitation interest accruing
after the commencement of any such proceeding at the rate
specified in the documentation governing the terms of the
respective Senior Indebtedness) in cash or in a manner
satisfactory to all of the Holders, before any member of the
Malin Group is entitled to receive any payment on account of
the Subordinated Obligations;
(ii) any payment or distribution of assets of Xxxxxx
of any kind or character, whether in cash, property or
securities, to which any member of the Malin Group would be
entitled except for the provisions of this Article, including
any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness
of Xxxxxx being subordinated to the payment of the
Subordinated Obligations, shall be paid by the liquidating
trustee or agent or other person making such payment or
distribution directly to the Holders of the Senior
Indebtedness for application to the payment of such Senior
Indebtedness (in the same priority as set forth in Section
3.02(b)), except that a member of the Malin Group shall be
entitled to receive securities that are subordinated to Senior
Indebtedness remaining outstanding after such proceeding to at
least the same extent as such member`s Subordinated
Obligations; and
(iii) in the event that notwithstanding the foregoing
provisions of this Section 3.03, any payment or distribution
of assets of Xxxxxx of any kind or character, whether in cash,
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property or securities, including any such payment or
distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of Xxxxxx being
subordinated to the payment of the Subordinated Obligations,
shall be received by any member of the Malin Group on account
of the Subordinated Obligations before all Senior Indebtedness
is paid in full, such payment or distribution shall be
received and held in trust for the benefit of, and shall be
paid over to, the Holders of the Senior Indebtedness remaining
unpaid or unprovided for (for application to the payment of
such Senior Indebtedness in the same priority as set forth in
Section 3.02(b)) until all such Senior Indebtedness shall have
been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the holders
of such Senior Indebtedness, except that a member of the Malin
Group shall be entitled to receive securities that are
subordinated to Senior Indebtedness to at least the same
extent as such member`s Subordinated Obligations.
(iv) Xxxxxx shall give prompt written notice to the
Holders and to the Malin Group of any dissolution, winding up,
liquidation or reorganization of Xxxxxx.
Section 3.04. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
XXXXXX OR HOLDERS OF SENIOR INDEBTEDNESS. The right or interest of any present
or future Holders of any Senior Indebtedness, and all agreements and obligations
of the member of the Malin Group under this Article, shall remain in full force
and effect irrespective of: (i) any change in the time, manner or place of
payment of, or in any other term in respect of, all or any of the Senior
Indebtedness, or any amendment or waiver of any agreement or instrument related
thereto; (ii) any exchange or release of, or non-perfection of any lien on or
security interest in, any collateral, or any release from, amendment or waiver
of or consent to departure from any guaranty or other obligation, for all or any
of the Senior Indebtedness; (iii) any other circumstance which might otherwise
constitute a defense available to or discharge of the member of the Malin Group
in respect of the provisions of this Article; or (iv) any act or failure to act
on the part of Xxxxxx or by any act or failure to act, in good faith, by any
Holder of the Senior Indebtedness, or by any noncompliance by Xxxxxx with the
terms of the Agreement, regardless of any knowledge thereof which any Holder of
Senior Indebtedness may have or be otherwise charged with.
Section 3.05. SUBORDINATED OBLIGATIONS SUBORDINATED TO THE DMG LOAN AND
THE PREFERRED STOCK.
(a) DMG LOAN. Each of Xxxxxx and each member of the Malin
Group agrees that the Subordinated Obligations are subordinated to the prior
payment in full of all amounts owing to the DMG Group in respect of the DMG
Loan. The foregoing subordination shall be to the same extent and with the same
waiver and reinstatement rights as the Subordinated Obligations` subordination
to the Senior Indebtedness described in Sections 3.01 through 3.04 hereof.
(b) PREFERRED STOCK. Each of Xxxxxx and each member of the
Malin Group agrees that no member of the Malin Group will, directly or
indirectly, demand or accept payment, by Xxxxxx or any subsidiary of Xxxxxx, of
any portion of the Subordinated Obligations, owing to such member, its
affiliates or members of his or her immediate family until all outstanding
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shares of the Preferred Stock shall have been redeemed or converted into common
stock of Xxxxxx. All payments or proceeds received by any such member contrary
to the provisions of this Section 3.05(b) shall be received in trust for the
benefit of the holders of the Preferred Stock, and shall be segregated from
other funds of such member and shall forthwith be paid over, at the election of
the holders of 51% or more of the Preferred Stock, either (i) to the holders of
the Preferred Stock, in redemption of such Preferred Stock (or a portion
thereof), on a pro rata basis, pursuant to the terms of the certificate of
designation of the Preferred Stock or (ii) to Xxxxxx, in each case in the same
form received (with any necessary endorsements). Each of Xxxxxx and each member
of the Malin Group further agrees that, until such time as all of the
outstanding shares of Preferred Stock are redeemed or converted to common stock,
no member of the Malin Group will, without the prior written consent of the
holders of 51% of the Preferred Stock, directly or indirectly, make any offer,
sale, assignment, transfer, pledge, hypothecation or other encumbrance, contract
to sell, grant of an option to purchase or sell or other disposition of, or
enter into any transaction or device designed to, or which could reasonably be
expected to result in the disposition by any such member at any time in the
future of, any capital stock, indebtedness or other securities of Xxxxxx or of
any securities convertible into or exercisable or exchangeable for any capital
stock, indebtedness, or other securities of Xxxxxx.
(c) CONVERSION OF MALIN GROUP LOAN. Nothing contained in this
Section 3.05 shall be deemed to prohibit or restrict any member of the Malin
Group from (i) its or his converting its or his portion of the Malin Group Loan
into common stock of Xxxxxx or (ii) transferring its or his portion of the Malin
Group Loan to Xxxxxx or Xxxxxx`s designee.
Section 3.06. PREFERRED STOCK AND DMG LOAN.
(a) SUBORDINATION OF PREFERRED STOCK TO SENIOR INDEBTEDNESS.
SDS and the DMG Group agree that their rights in respect of their Preferred
Stock are subordinated to the prior payment in full of all amounts owing (i) to
Xxxxxx in respect of the Senior Indebtedness, and (ii) to the DMG Group in
respect of the DMG Loan. The foregoing subordinations, shall be to the same
extent and with the same waiver and reinstatement rights as the subordination
described in Sections 3.01 through 3.04 hereof, as if SDS`s and the DMG Group`s
Preferred Stock were the "Subordinated Obligations."
(b) DMG LOAN AND SENIOR INDEBTEDNESS. Xxxxxx and the DMG Group
agree that, subject to the Software Security Agreement, the Intercreditor
Agreement, and Recital Q above, the Senior Indebtedness and the DMG Loan shall
rank pari passu in priority payment.
ARTICLE IV.
WAIVER OF SUBROGATION
Section 4.01 .WAIVER. Each of the Related Parties and each member of
the Malin Group (each, a "POTENTIAL SUBROGEE") hereby irrevocably waives any
claim or other right such Potential Subrogee may now or hereafter acquire
against Xxxxxx that arises from the existence, payment, performance or
enforcement obligation of such Potential Subrogee under any guaranty, indemnity
or other surety agreement for any obligation of Xxxxxx. Such waiver includes a
waiver of any right of subrogation, reimbursement, exoneration, or
8
indemnification, any right to participate in the claims or remedies of Xxxxxx or
the DMG Group against Xxxxxx or any collateral that Xxxxxx or the DMG Group now
has or hereafter acquires to secure the Senior Indebtedness and the DMG Loan
regardless of whether such claim, remedy, or right arises in equity, or under
contract, statute or common law. If any amount shall be paid to any Potential
Subrogee in violation of the preceding sentence and the Senior Indebtedness
shall not have been paid in cash in full, such amount shall be deemed to have
been paid to such Potential Subrogee, for the benefit of, and held in trust for,
the Holders and the DMG Group, and shall forthwith be paid to the Holders and
the DMG Group, to be credited and applied to the Senior Indebtedness and the DMG
Loan, whether matured or unmatured, in the order of priority established under
this Agreement and the Intercreditor Agreement.
Section 4.02. CONSIDERATION. Each Potential Subrogee acknowledges that
it will each receive benefits from the financing and other arrangements
contemplated by the Transaction Documents and that the waiver set forth in
Section 4.01 and the release and covenants of Article V are knowingly made and
entered into in contemplation of such benefits. In furtherance of the foregoing,
until all of the Senior Indebtedness and the DMG Loan shall have been paid in
full, each Potential Subrogee shall refrain from taking any action or commencing
any proceeding against Xxxxxx (or their respective successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts paid to Xxxxxx, SDS, or any member of the DMG Group in respect of the
Original Xxxxxx Loan, the Xxxxxx Loan, the DMG Loan, or the Preferred Stock.
ARTICLE V
RELEASE
Section 5.01 RELEASE OF XXXXXX, ET AL. Each of Watley, Watley, Inc.,
the Related Parties, the members of the Malin Group, SDS (in SDS`s capacity as a
holder of Preferred Stock), and the members of the DMG Group (in such members`
capacity as holders of Preferred Stock), for itself, its successors and assigns,
and such individuals` heirs, legal representatives and assigns, as applicable
(collectively, the "RELEASING PARTIES"), does hereby unconditionally and
irrevocably compromise, settle, remise, acquit, and fully and forever release
and discharge Xxxxxx, its affiliates and subsidiaries and their officers,
servants, employees, agents, attorneys, principals, directors and shareholders,
and their respective heirs, legal representatives, successors, and assigns
(collectively, the "RELEASED PARTIES") from any and all claims, demands, causes
of action, obligations, remedies, suits, damages, and liabilities (collectively,
the "CLAIMS") of any nature whatsoever, whether now known, suspected or claimed,
whether arising under common law, in equity, or under statute, which the
Releasing Parties ever had, now have, or in the future may claim to have against
the Released Parties which may have arisen at any time on or prior to the date
hereof in any manner related to the Clearing Agreement and Xxxxxx`s obligations
thereunder, the Original Xxxxxx Loan, the Xxxxxx Loan, the other Transaction
Documents, or the enforcement or attempted enforcement by Xxxxxx of its rights,
remedies or recourses related thereto.
Section 5.02 COVENANT NOT TO XXX RELEASED PARTIES. Each Releasing Party
forever covenants and agrees never to commence, voluntarily aid in any way,
prosecute, or cause to be commenced or prosecuted against the Released Parties
any action or other proceeding based on any of the Claims released pursuant to
Section 5.01.
9
Section 5.03 RELEASE OF SDS AND THE DMG GROUP. Each of Watley, Watley,
Inc., the Related Parties, the members of the Malin Group, and Xxxxxx (in
Xxxxxx`s capacity as a holder of Preferred Stock) for itself, its successors and
assigns and such individuals` heirs, legal representatives, and assigns, as
applicable (collectively, the "SECTION 5.03 RELEASING PARTIES"), does hereby
unconditionally and irrevocably compromise, settle, remise, acquit, and fully
and forever release and discharge SDS and each member of the DMG Group, its
affiliates and subsidiaries and their officers, servants, employees, agents,
attorneys, principals, directors and shareholders, and their respective heirs,
legal representatives, successors, and assigns (collectively, the "SECTION 5.03
RELEASED PARTIES") from any and all Claims of any nature whatsoever, whether now
known, suspected or claimed, whether arising under common law, in equity, or
under statute, which the Section 5.03 Releasing Parties ever had, now have, or
in the future may claim to have against the Section 5.03 Released Parties which
may have arisen at any time on or prior to the date hereof in any manner related
to (i) SDS`s or any member of the DMG Group`s status as an owner of Preferred
Stock, or (ii) the DMG Loan.
Section 5.04 COVENANT NOT TO XXX SECTION 5.03 RELEASED PARTIES. Each
Section 5.03 Releasing Party forever covenants and agrees never to commence,
voluntarily aid in any way, prosecute, or cause to be commenced or prosecuted
against the Section 5.03 Released Parties any action or other proceeding based
on any of the Claims released pursuant to Section 5.03.
ARTICLE VI.
INDEMNITY
Xxxxxx and Xxxxxx, Inc. shall indemnify, defend, and hold Xxxxxx, SDS,
and the DMG Group harmless from and against any and all Claims of whatever
nature arising from or related to (i) the failure of Watley, Watley, Inc., any
Related Party or any member of the Malin Group to perform in accordance with its
agreements in the Transaction Documents or (ii) the assertion of any Claim
released by Watley, Watley, Inc., any Related Party or any member of the Malin
Group pursuant to Article V.
ARTICLE VII
FOREBEARANCE NOT FORGIVENESS
Each Releasing Party agrees that Xxxxxx`s forebearance from exercising
its rights in respect of the Original Xxxxxx Loan shall not be construed as the
forgiveness of any obligation or indebtedness owed to Xxxxxx nor as an agreement
to forebear from enforcing Xxxxxx`s remedies, in respect of the Xxxxxx Loan or
any other obligation or indebtedness owing or to become owing to Xxxxxx. Each
Releasing Party agrees, for the benefit of Xxxxxx, and each Section 5.03
Releasing Party agrees, for the benefit of the DMG Group, that Xxxxxx`s and the
DMG Group`s advance of additional funds pursuant to the Pension Loan and the DMG
Loan, respectively, shall not be construed as an agreement to advance any
additional funds to Xxxxxx in the future.
ARTICLE VIII.
MISCELLANEOUS
Section 8.01 NON-PETITION. Each of the Related Parties, the members of
the Malin Group, the members of the DMG Group, and SDS covenants and agrees that
he, she, or it will not institute against, or join any other person or entity in
10
instituting against, Xxxxxx or Xxxxxx, Inc. any bankruptcy, reorganization,
arrangement, insolvency, or liquidation petition or similar proceedings under
the laws of the United States or any state of the United States.
Section 8.02 MARGIN LOANS. Xxxxxx hereby represents, warrants and
covenants for the benefit of Xxxxxx and the DMG Group, that no portion of the
funds advanced in respect of the Original Xxxxxx Loan were used, and no portion
of the Xxxxxx Loan or the DMG Loan will be used, to purchase "margin stock"
within the meaning of Regulation U promulgated by the Board of Governors of the
Federal Reserve System.
Section 8.03. CHIEF EXECUTIVE OFFICE. Xxxxxx hereby represents,
warrants, and covenants that Xxxxxx`s chief executive office is, and shall
remain, in New York.
Section 8.04 GOVERNING LAW, JURISDICTION, CONSENT TO SERVICE OF
PROCESS.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each party hereto hereby irrevocably and unconditionally
submits, for such party and such party`s property, to the non-exclusive
jurisdiction of the District Court of the State of Texas sitting in Xxxxxx
County, Texas and of the United States District Court of the Southern District
of Texas, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding shall be heard and determined in such Texas State or, to the extent
permitted by law, in such Federal court. Such Texas State court or federal court
shall apply the substantive laws of the State of New York in interpreting and
construing this Agreement. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(c) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent such party may legally and effectively do so, any
objection which such party may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to the Transaction
Documents in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party hereto irrevocably consents to service of
process in the manner provided for notices in Section 8.06. Nothing in this will
affect the right of Xxxxxx or the DMG Group to serve process in any other manner
permitted by law.
Section 8.05 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH OF THE
11
PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGE THAT THEY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.06 .NOTICES. Any notice, demand, consent, approval, request,
or other communication or document to be provided under any of the Transaction
Documents shall be (a) in writing and (b) deemed to have been provided (i) 48
hours after being sent by certified or registered mail in the U.S. mails,
postage prepaid, return receipt requested, to the address of such parties set
forth below or to such other address in the United States of America as such
party may designate from time to time by notice to the other parties hereto, or
(ii) upon giving by hand or other actual delivery (including delivery by a
nationally recognized overnight courier) to such party. Notices shall be sent to
the parties at the following addresses:
XXXXXX:
Xxxxxx Financial Services, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxxx
Telephone No. (000) 000-0000
Fax No: (000) 000-0000
SDS:
SDS Merchant Fund, L.P.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
THE DMG GROUP:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxx XxXxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
00
XXXXXX, XXXXXX, INC., THE RELATED PARTIES OR THE MALIN GROUP:
c/o X.X. Xxxxxx Group Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000, Ext. 5811
Fax No.: (000) 000-0000
Section 8.07.REPRESENTATIONS. Watley, Watley, Inc., the Related
Parties, the members of the Malin Group, and SDS each represents and warrants
with respect to itself, but not with respect to any other person or entity as
follows:
(a) AUTHORITY. It has all requisite power and authority to
execute each Transaction Document to be executed by it.
(b) DUE AUTHORIZATION, EXECUTION AND DELIVERY. This Agreement,
and each other Transaction Document to be executed by it, has been or will have
been duly authorized, executed, and delivered by it.
(c) ENFORCEABILITY. This Agreement and the other Transaction
Documents to be executed and delivered by it, when so executed and delivered,
will be enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting creditors` rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
(d) NO ASSIGNMENT OF CLAIMS. It has not assigned any of its
Claims.
(e) CONTEMPORANEOUS EXCHANGE. The security to be granted
pursuant to the Software Security Agreement and the General Security Agreement
is intended to be a contemporaneous exchange for new value given to Xxxxxx and
shall be, in fact, substantially contemporaneous, if such security agreements
are executed and delivered within 30 days after the date of this Agreement.
(f) SECURITY. Xxxxxx and Xxxxxx, Inc. own all of the
collateral described in the Software Security Agreement and the General Security
Agreement, free and clear of any prior liens or security interests, except as
set forth on EXHIBIT O attached hereto.
(g) OWNERSHIP OF PREFERRED STOCK. The ownership of all of the
Preferred Stock, immediately prior to the transfer of 70 shares of Preferred
Stock to Xxxxxx, and immediately after such transfer, is as reflected on EXHIBIT
D attached hereto.
Section 8.08. FURTHER ASSURANCES.
(a) EXECUTION OF TRANSACTION DOCUMENTS. The parties hereto
recognize that the Transaction Documents will be executed after the effective
date hereof and after initial advances of amounts have been made under the
Xxxxxx Note and the DMG Note. Notwithstanding such subsequent execution, the
execution of all of the Transaction Documents is a material part of the
13
consideration for Xxxxxx`s and the DMG Group`s agreement to fund advances under
their respective loans. The parties hereto covenant to use reasonable commercial
efforts to execute all the Transaction Documents as soon as practicable and in
any event within 5 days after the date hereof. If all of the Transaction
Documents are not executed within such 5 day period, the Xxxxxx Loan and the DMG
Loan shall be deemed to be in default, and the holders thereof may exercise any
and all remedies thereunder. Neither Xxxxxx nor the DMG Group would have entered
into the Xxxxxx Loan or the DMG Loan absent the covenants of the parties in this
Section 8.08(a).
(b) SUBSEQUENT ACTIONS. The parties hereto agree to take all
other actions and execute all such other documents as Xxxxxx may reasonably
request from time to time in order to effectuate the purposes of this Agreement.
Section 8.09 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that none of Watley,
Watley, Inc., the Related Parties, or any member of the Malin Group may assign
or otherwise transfer any of such person`s or entity`s rights or obligations
hereunder without the prior written consent of Xxxxxx (and any attempted
assignment or transfer by such person or entity without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any person or entity (other than the parties hereto,
their respective successors and assigns permitted hereby) any legal or equitable
right, remedy or claim under or by reason of this Agreement. Xxxxxx may assign
to one or more assignees all or a portion of its rights and obligations under
this Agreement without the consent of any other party hereto.
Section 8.10 SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 8.11 COUNTERPARTS. The parties may sign this Agreement in any
number of counterparts and on separate counterparts, each of which shall be an
original but all of which when taken together shall constitute one and the same
instrument.
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXXXX FINANCIAL SERVICES, INC., a
North Carolina corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
-------------------------------------
SDS MERCHANT FUND, L.P., a Delaware limited partnership
By:
---------------------------------------------------
, general partner
By:
--------------------------------------------
Name:
-------------------------------------------------
Title:
------------------------------------------------
DMG LEGACY INTERNATIONAL LTD., a
British Virgin Islands corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
-------------------------------------
DMG LEGACY INSTITUTIONAL FUND,
LLC, a Delaware limited liability company
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
DMG LEGACY FUND, LLC, a Delaware limited
liability company
By:
-----------------------------------
Name:
----------------------------------
Title:
----------------------------------
15
X. X. XXXXXX GROUP INC., a Delaware
corporation
By:
-------------------------------------------------
Name:
--------------------------------------------
Title:
----------------------------------------------
X. X. XXXXXX, INC., a New York corporation
By:
-------------------------------------------------
Name:
--------------------------------------------
Title:
----------------------------------------------
RELATED PARTIES:
----------------------------------------------------
XXXXXX XXXXX
---------------------------------------------------
XXXXXX XXXXX
---------------------------------------------------
XXXXX XXXXX
16
---------------------------------------------------
XXXX XXXXXXXXX
---------------------------------------------------
XXXX XXXXXXXX
---------------------------------------------------
XXXXXXX X. XXXXXX
---------------------------------------------------
XXXXXXX XXXXXXX
---------------------------------------------------
XXXXXXX XXXXX
MALIN GROUP MEMBERS:
LAN/WAN, INC.
By:
-------------------------------------------------
XXXXXX XXXXX
Title:
--------------------------------------------
ATLANTIC GROUP, INC.
By:
-------------------------------------------------
XXXXXX XXXXX
Title:
--------------------------------------------
KETER CORP.
By:
-------------------------------------------------
XXXXX XXXXX
Title:
--------------------------------------------
--------------------------------------------
XXXXXX XXXXX
17
-------------------------------------------
XXXXXXX X. XXXXXX
-------------------------------------------
XXXX XXXXXXXXX
18
EXHIBIT A
MALIN GROUP LOANS
MALIN GROUP LOANS
INTEREST AS OF
MALIN GROUP PRINCIPAL MARCH 27, 2002
MEMBER BALANCE ($)
------ ------- --------------
($)
Lan/Wan, Inc. 1,075,000 _______
Atlantic Group, Inc. 875,000 _______
Keter Corp 950,000 _______
Xxxxxx Xxxxx 180,000 _______
Xxxxxxx X. Xxxxxx 500,000 _______
Xxxx Xxxxxxxxx 950,000 _______
----------
TOTAL 4,530,000
19
EXHIBIT B
RELATED PARTY STOCK OWNERSHIP
STOCK OWNERSHIP
RELATED PARTY SHARES
------------- ---------------
Xxxxxx Xxxxx 2,257,570
Xxxxx Xxxxx 1,016,530
Xxxxxx Xxxxx 872,600
Xxxxxxx X. Xxxxxx 354,600
Xxxx Xxxxxxxx 273,685
Xxxx Xxxxxxxxx --
Xxxxxxx Xxxxxxx _______
Xxxxxxx Xxxxx _______
20
EXHIBIT D
PREFERRED STOCK DETAILS
-----------------------
LIQUIDATION PREFERENCE
NUMBER OF SHARES ----------------------
OF SERIES A
PREFERRED SHAREHOLDER CONVERTIBLE PER SHARE TOTAL
--------------------- PREFERRED STOCK --------- -----
---------------
PRIOR TO MARCH 27, 2002:
------------------------
SDS Merchant Fund, L.P. 345 $10,000 $3,450,000
DMG Group 235 $10,000 $2,350,000
AFTER MARCH 27, 2002:
---------------------
SDS Merchant Fund, L.P. 275 $10,000 $2,750,000
DMG Group 235 $10,000 $2,350,000
Xxxxxx Financial Services, Inc. 70 $10,000 $700,000
21
EXHIBIT G
LOAN DETAILS
------------
COMMITMENT AMOUNT LENT
LENDER AMOUNT AS OF 3/29/02
------ ---------- -------------
X. XXXXXX LOAN
-----------
Xxxxxx Financial Services, $1,600,000 $970,000
Inc.
B. DMG LOAN
--------
DMG Legacy Fund LLC $ 38,304 $ 18,300
DMG Legacy Institutional $ 321,696 $153,700
Fund LLC
DMG Legacy International $ 540,000 $ 258,000
Ltd.
22
EXHIBIT O
EXISTING LIENS SCHEDULE
FOR X.X. XXXXXX GROUP INC.
SECURED PARTY DESCRIPTION OF COLLATERAL FILE NO., DATE AND JURISDICTION OF
------------- ------------------------- ----------------------------
FINANCING STATEMENT
-------------------
Dell Financial Services, L.P. Computer equipment and peripherals leased pursuant to a Lease No. 99-205232; 10/08/99;
Agreement dated September 27, 0000 Xxxxxxxxx xx Xxxxx xx Xxxxx
Dell Financial Services, L.P. Computer equipment and peripherals leased pursuant to a Lease No. 99-226008; 11/09/99;
Agreement dated October 27, 0000 Xxxxxxxxx xx Xxxxx xx Xxxxx
Dell Financial Services, L.P. Computer equipment and peripherals leased pursuant to a Lease No. 99-226495; 11/10/99;
(THIS COLLATERAL S THE SAME Agreement dated October 27, 0000 Xxxxxxxxx xx Xxxxx xx Xxxxx
AS THE FOREGOING)
General Electric Capital Corporation Lease and sale leaseback of computer equipment and peripherals No. 99-237197; 11/30/99;
Secretary of State of Texas
Pentech Financial Services, Inc. Equipment lease pursuant to Supplement No. 001, dated April 1, No. 00-488281; 5/01/200;
2000 to Master Equipment Lease No. 300651, effective April 1, Secretary of State of Texas
2000
PFF Bank and Trust Partial Assignment from Pentech Financial of equipment lease No. 00-840034; 8/03/2000;
pursuant to Supplement No. 001, dated April 1, 2000 to Master Secretary of State of Texas
Equipment Lease No. 300651, effective April 1, 2000
23
SECURED PARTY DESCRIPTION OF COLLATERAL FILE NO., DATE AND JURISDICTION OF
------------- ------------------------- ----------------------------
FINANCING STATEMENT
-------------------
Pentech Financial Services, Inc. Equipment lease pursuant to Supplement No. 003, dated July 1, No. 00-559119; 8/07/2000;
2000 to Master Equipment Lease No. 300651, effective April 1, Secretary of State of Texas
2000
The Cit Group Partial Assignment from Pentech Financial of equipment lease No. 01-639518; 4/02/2001;
pursuant to Supplement No. 003, dated July 1, 2000 to Master Secretary of State of Texas
Equipment Lease No. 300651, effective April 1, 2000
Pentech Financial Services, Inc. Equipment lease pursuant to Supplement No. 001, dated April 1, No. 0028018; 5/03/2000;
2000 to Master Equipment Lease No. 300651, effective April 1, Secretary of State of
2000 Delaware
PFF Bank and Trust Partial Assignment from Pentech Financial of equipment lease No. 0045360; 7/14/2000;
pursuant to Supplement No. 001, dated April 1, 2000 to Master Secretary of State of
Equipment Lease No. 300651, effective April 1, 2000 Delaware
Pentech Financial Services, Inc. Equipment lease pursuant to Supplement No. 002, dated July 1, No. 0047346; 7/24/2000;
2000 to Master Equipment Lease No. 300651, effective April 1, Secretary of State of
2000 Delaware
Imperial Bank Partial Assignment from Pentech Financial of equipment lease No. 0056400; 8/24/2000;
pursuant to Supplement No. 002, dated July 1, 2000 to Master Secretary of State of
Equipment Lease No. 300651, effective April 1, 2000 Delaware
Imperial Bank (THIS SEEMS Partial Assignment from Pentech Financial of equipment lease No. 0065458; 9/26/2000;
TO BE A DUPLICATE OF pursuant to Supplement No. 001, dated July 1, 2000 to Master Secretary of State of
THE FOREGOING) Equipment Lease No. 300651, effective April 1, 2000 Delaware
24
SECURED PARTY DESCRIPTION OF COLLATERAL FILE NO., DATE AND JURISDICTION OF
------------- ------------------------- ----------------------------
FINANCING STATEMENT
-------------------
Pentech Financial Services, Inc. Equipment lease pursuant to Supplement No. 003, dated July 1, No. 0047347; 7/24/2000;
2000 to Master Equipment Lease No. 300651, effective April 1, Secretary of State of
2000 Delaware
The Cit Group Partial Assignment from Pentech Financial of equipment lease No. 10307244; 4/02/2001;
pursuant to Supplement No. 003, dated July 1, 2000 to Master Secretary of State of
Equipment Lease No. 300651, effective April 1, 2000 Delaware
Pentech Financial Services, Inc. Equipment lease pursuant to Supplement No. 004, dated July 1, No. 0048908; 7/28/2000;
2000 to Master Equipment Lease No. 300651, effective April 1, Secretary of State of
2000 Delaware
Imperial Bank Partial Assignment from Pentech Financial of equipment lease No. 0056400; 8/24/2000;
pursuant to Supplement No. 003, dated July 1, 2000 to Master Secretary of State of
Equipment Lease No. 300651, effective April 1, 2000 Delaware
New York Community Investment All inventory, accounts receivable, contract rights,
Company L.L.C. instruments, machinery, and equipment
25
