OMNIBUS AMENDMENT AND CONSENT
Exhibit
10.2
OMNIBUS
AMENDMENT AND CONSENT
This
Omnibus Amendment and Waiver (this “Amendment”), dated as of October 3, 2006, by
and between GVI SECURITY SOLUTIONS, INC.., a Delaware corporation (the
“Company”)
and
Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”),
amends that certain (i) Securities Purchase Agreement, dated as of May 27,
2004,
by and between the Company and Laurus (as amended, modified or supplemented
from
time to time, the “Securities
Purchase Agreement”);
(ii)
that certain Secured Convertible Term Note, made as of May 27, 2004 by the
Company in favor of Laurus in the initial face amount of $5,000,000 (as amended,
modified or supplemented from time to time, the “Term
Note”);
(iii)
that certain Security Agreement, dated as of May 27, 2004 between the Company
and Laurus (as amended, modified or supplemented from time to time, the
“Security
Agreement”),
(iv)
that certain Secured Convertible Minimum Borrowing Note, made as of May 27,
2004
by the Company in favor of Laurus in the initial face amount of $5,000,000
(as
amended, modified or supplemented from time to time, the “Minimum
Borrowing Note”);
(v)
that certain Secured Revolving Note, made as of May 27, 2004 by the Company
in
favor of Laurus in the initial face amount of $5,000,000 (as amended, modified
or supplemented from time to time, the “Revolving
Note”
and,
together with the Securities Purchase Agreement, the Term Note, the other
Related Agreements (as defined in the Securities Purchase Agreement), the
Security Agreement, the Minimum Borrowing Note and the other Ancillary
Agreements (as defined in the Security Agreement, the “Funding
Documents”).
Capitalized terms used but not defined herein shall have the meanings given
them
in the Securities Purchase Agreement and/or the Security Agreement, as
applicable.
WHEREAS,
the Company has requested that Laurus consent to (i) an additional financing
whereby the Company would issue to new investors (the “Holders”)
up to
$5,000,000 in aggregate principal amount of Subordinated Secured Promissory
Notes of the Company dated as of the date hereof (the “Subordinated Notes”)
and
(ii) the grant by the Company and its subsidiaries of Liens against
substantially all of their assets and property to W-net, Inc., California
corporation, as collateral agent for the Holders (the “Agent”
and,
together with the Holders, the “Subordinated
Lenders”
and
each, a “Subordinated
Lender”)
on a
subordinated basis to those Liens granted by the Company to Laurus;
and
WHEREAS,
the Company and Laurus have agreed to make certain changes to the Securities
Purchase Agreement, the Term Note, the Security Agreement, the Minimum Borrowing
Note and the Revolving Note.
NOW,
THEREFORE, in consideration of the above, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto agree as follows:
CONSENT
1. Laurus
hereby consents to (i) the issuance of the Subordinated Notes to the
Subordinated Lenders to the extent that the terms and conditions of such
Subordinate Notes and the other documentation entered into in connection
therewith conform in all material respects to the terms and conditions set
forth
in the Term Sheet attached hereto as Exhibit
A,
and
that such issuance and the issuance of Common Stock as provided in the Term
Sheet shall not be deemed to result in a change in the controlling ownership
of
the Company, and (ii) the grant by the Company and its subsidiaries to the
Agent, as collateral agent on behalf of the Subordinated Lenders, of a Lien
on
substantially all of the assets and property of the Company and its subsidiaries
to the extent subordinated in favor of Liens granted by the Company and its
subsidiaries to Laurus pursuant to the Subordination Agreement attached hereto
as Exhibit
B
(the
“Subordination
Agreement”);
AMENDMENTS
2. The
Securities Purchase Agreement is hereby amended and restated in the form
attached hereto as Exhibit
C
(the
“Amended
and Restated Securities Purchase Agreement”);
3. The
Term
Note is hereby amended and restated in the form attached hereto as Exhibit
D
(the
“Amended
and Restated Term Note”).
For
the avoidance of doubt, the amendment and restatement of the Term Note as set
forth in this Section 3 shall be in substitution for and not in satisfaction
of
the Term Note;
4. The
Security Agreement is hereby amended and restated in the form attached hereto
as
Exhibit
E
(the
“Amended
and Restated Security Agreement”).
5. The
Minimum Borrowing Note is hereby amended and restated in the form attached
hereto as Exhibit
F
(the
“Amended
and Restated Minimum Borrowing Note”).
For
the avoidance of doubt, the amendment and restatement of the Minimum Borrowing
Note as set forth in this Section 5 shall be in substitution for and not in
satisfaction of the Minimum Borrowing Note;
6. The
Revolving Note is hereby amended and restated in the form attached hereto as
Exhibit
G
(the
“Amended
and Restated Revolving Note”).
For
the avoidance of doubt, the amendment and restatement of the Revolving Note
as
set forth in this Section 6 shall be in substitution for and not in satisfaction
of the Revolving Note;
MISCELLANEOUS
7. Each
amendment and consent set forth herein shall only be effective as of the first
date upon which (the “Amendment
Effective Date”):
(i)
the Company shall have duly executed, witnessed (where applicable) and delivered
to Laurus each of the Amended and Restated Term Note, the Amended and Restated
Minimum Borrowing Note and the Amended and Restated Revolving Note, (ii) each
of
the Company, the Agent and each other Subordinated Lender shall have duly
executed and delivered to Laurus the Subordination Agreement and
(iii) the
Company and Laurus shall have executed and the Company shall have delivered
to
Laurus its respective counterpart to this Amendment.
8. Except
as
specifically set forth in this Amendment, there are no other amendments,
modifications or waivers to the Funding Documents, and all of the other forms,
terms and provisions of the Funding Documents remain in full force and
effect.
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9. The
Company hereby represents and warrants to Laurus that (i) no Event of Default
exists on the date hereof, after giving effect to this Amendment, (ii) on the
date hereof, after giving effect to this Amendment, all representations and
warranties made by the Company in connection with the Funding Documents are
true, correct and complete and (iii) on the date hereof, after giving effect
to
this Amendment, all of the Company’s covenant requirements have been
met.
10. From
and
after the Amendment Effective Date, all references in the Funding Documents
shall be deemed to be references to the Funding Documents as modified
hereby.
11. The
Company understands that it has an affirmative obligation to make prompt public
disclosure of material agreements and material amendments to such agreements.
It
is the Company’s determination that this Amendment is material. The Company
agrees to file an 8-K within 2 days of the date hereof and in the form otherwise
prescribed by the SEC.
12. This
Amendment shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of and be
enforceable by each of the parties hereto and their respective successors and
permitted assigns. THIS
AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAW OF THE STATE OF NEW YORK. This
Amendment may be executed in any number of counterparts, each of which shall
be
an original, but all of which shall constitute one instrument.
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IN
WITNESS WHEREOF,
each
Company and Laurus has caused this Amendment to the Funding Documents to be
signed in its name effective as of this __ day of October 2006.
GVI SECURITY SOLUTIONS, INC. | ||
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By: | ||
Name:
Title:
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LAURUS MASTER FUND, LTD. | ||
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By: | ||
Name:
Title:
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EXHIBIT
A
Term
Sheet
5
EXHIBIT
B
Subordination
Agreement
6
EXHIBIT
C
Form
of Amended and Restated Securities Purchase Agreement
7
EXHIBIT
D
Form
of Amended and Restated Term Note
8
EXHIBIT
E
Form
of Amended and Restated Security Agreement
9
EXHIBIT
F
Form
of Amended and Restated Minimum Borrowing Note
10
EXHIBIT
G
Form
of Amended and Restated Revolving Note
11