Exhibit 10.5
AMENDMENT AND WAIVER AGREEMENT
THIS AMENDMENT AND WAIVER AGREEMENT (this "Agreement"), effective as of August
1, 2004, is entered into by and among MERCATOR MOMENTUM FUND, L.P., a California
limited partnership ("MMF"), MERCATOR MOMENTUM FUND III, L.P., a California
limited partnership ("MMFIII"), MERCATOR FOCUS FUND, L.P., a California limited
partnership ("MFF" and together with MMF and MMFIII, the "Lenders" and each of
them, a "Lender"), MERCATOR ADVISORY GROUP, LLC, as Agent for Lenders ("Agent"),
and PRESIDION SOLUTIONS, INC., a Florida corporation ("Company"), and PRESIDION
CORPORATION, formerly known as MediaBus Networks, Inc., a Florida corporation
("Parent" and together with Company, the "Borrowers" and each, a "Borrower"), as
with reference to the following facts:
RECITALS
A. Borrowers have issued, on a joint and several basis, that certain 6.5%
Secured Convertible Debenture due February 12, 2004 in the original
principal amount of $1,560,000 in favor of MFF (as amended from time to
time, the "MFF Debenture").
B. Borrowers have issued, on a joint and several basis, that certain 6.5%
Secured Convertible Debenture due February 12, 2004 in the original
principal amount of $240,000 in favor of MMF (as amended from time to
time, the "MMF Debenture").
C. Borrowers have issued, on a joint and several basis, that certain 6.5%
Secured Convertible Debenture due February 12, 2004 in the original
principal amount of $200,000 in favor of MMFIII (as amended from time to
time, the "MMFIII Debenture" and together with the MFF Debenture and the
MMF Debenture, the "Debentures").
D. Borrowers have defaulted (such Defaults, the "Existing Defaults"):
(1) under Section 3(a)(ii) of each of the Debentures, by reason of
the fact that Parent has failed to file the Underlying Share
Registration Statement with the Commission within sixty days of
the Original Issue Date;
(2) under Section 3(a)(viii) of each of the Debentures, by reason of
the fact that the Underlying Share Registration Statement has not
been declared effective by the Commission on or prior to the one
hundred and fiftieth day of the Original Issue Date; and,
(3) under Section 3(a)(i) of each of the Debentures, by reason of the
fact the principal has not been paid as of the Maturity Date set
forth therein.
E. Borrowers have requested that Agent and Lenders:
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(1) forbear from exercising their available default rights and remedies
under the Debentures and applicable law in response to the Existing
Defaults;
(2) waive the Existing Defaults; and
(3) amend each of the Debentures as set forth below.
F. Agent and Lenders are willing to provide Borrowers with the foregoing
accommodations on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. Defined Terms. All initially capitalized terms used in this Agreement
(including, without limitation, in the Recitals hereto) shall have the
respective meanings specified in the Debentures.
2. Amendment to Debentures. Each of the Debentures is hereby amended as
follows:
(a) by amending and restating Section 3(a)(ii) of such Debenture, in
full as follows:
"(ii) the Parent shall fail to file the Underlying Shares
Registration Statement with the Commission on or prior to January
3, 2005,"
(b) by amending and restating Section 3(a)(viii) of such Debenture,
in full as follows:
"(viii)an Underlying Shares Registration Statement (as defined in
Section 5) shall not have been declared effective by the
Commission (as defined in Section 5) on or prior to January 31,
2005. The Company and the Parent shall each use their best
efforts and all available resources to have the Underlying Shares
Registration Statement declared effective by the Commission on or
prior to January 31, 2005,"
(c) by amending and restating all references to the Maturity Date to
read as follows:
"January 3, 2005"
3. Waiver. Agent and Lenders hereby waive, on a one-time basis, the
Existing Defaults provided that such waiver shall not constitute a
waiver of:
(a) any future breach of Sections 3(a)(ii) or 3(a)(viii) of any of
the Debentures; or
(b) any other term, condition, covenant, representation or warranty
contained in any Debenture or any future breach thereof.
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4. Condition Precedent. The effectiveness of this Agreement shall be
subject to the prior satisfaction of each of the following conditions:
(a) Agreement. Agent shall have received this Agreement, duly
executed by each of the Lenders and the Borrowers.
(b) Consent and Amendment Agreement of Guarantors. Each of the
Company, Xxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxx XX and Xxxxx X.
Xxxxxx (the "Guarantors") shall have executed the Consent and
Amendment Agreement of Guarantors in the form attached hereto as
Exhibit "A".
(c) Waiver and Amendment Fee. Borrowers shall have paid the Waiver
and Amendment Fee to Agent in immediately available funds.
5. Waiver and Amendment Fee. In consideration of Agent's and Lenders'
agreement to enter into this Agreement and provide Borrowers with the
accommodations provided hereunder Borrowers shall, concurrent with the
execution of this Agreement, pay to the Agent on behalf of the Lenders a
monthly fee, payable on the first of each calendar month commencing
September 1, 2004 and continuing thru January 3, 2005 in the amount of
$8,572.00 per month (the "Waiver and Amendment Fee") which shall be
fully-earned when paid and nonrefundable. The amount of the Waiver and
Amendment Fee accrued as of the date of this Agreement, $8,572.00, shall
be due and payable immediately.
6. Redemption of Debentures. Borrowers shall immediately tender to Lenders
a redemption payment with respect to the Debentures in an amount (a
"Redemption Amount") equal to 50% of the net cash proceeds (after
deduction of all reasonable transactional expenses) received by the
Borrowers from each offering of their debt or equity securities, or from
any loan transaction, following the date of this Agreement; provided
that the Redemption Amount shall not exceed the redemption price of the
then outstanding Debentures. The redemption price shall be 115% of the
principal amount redeemed plus accrued interest. Subject to the Lenders'
acceptance of any such tender, if the Redemption Amount equals or
exceeds the redemption price of the then outstanding Debentures, then
all of the Debentures shall be redeemed, while if the Redemption Amount
is less than the redemption price for the then outstanding Debentures,
then the Debentures shall be partially redeemed. All redemption payments
shall be allocated ratably among the Debentures. The Borrowers' failure
to immediately tender such a redemption payment with respect to the
Debentures in accordance with the terms hereof shall constitute an Event
of Default under each of the Debentures. Notwithstanding the foregoing,
the Lenders may (in their sole and absolute discretion) refuse to accept
any such tendered redemption payment. If the Lenders so refuse, the
Debentures shall not be redeemed and will remain outstanding.
7. Reimbursement of Expenses. Borrowers shall be obligated, jointly and
severally, to reimburse Agent and Lenders for any and all legal fees
(including the reasonable legal fees of Agent and Lenders' outside
counsel) and other expenses which are incurred by them in connection
with the approval, documentation, negotiation and implementation
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of this Agreement or in connection with the Existing Defaults within 5
days of receiving demand therefor. The Borrowers' failure to timely
reimburse such fees shall constitute an Event of Default under each of
the Debentures.
8. Release. In consideration of the execution and delivery of this
Agreement, and the forbearances and waivers requested of the Lenders,
each Borrower hereby releases, remises and forever discharges Agent and
Lenders, and each of them, and their respective officers, directors,
employees, agents, affiliates and attorneys, without conditions
precedent to effectiveness, from all actions and causes of action
heretofore arising out of or related to the Debentures or any document,
instrument or agreement executed in connection therewith or relating
thereto, or the relationship of any Borrower to Agent or any Lender, in
each case whether known or unknown to any Borrower as of the date
hereof. Each Borrower acknowledges that it has been advised by legal
counsel, to the extent that it has seen fit, and is familiar with and
waives the provision of California Civil Code Section 1542, which
provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
9. No Other Amendments; Reaffirmation of Debentures; No Defenses. Except as
expressly amended hereby, the Debentures shall remain unaltered and in
full force and effect. Each Borrower hereby reaffirms the Debentures and
its obligations to Lenders thereunder. Each Borrower represents and
warrants to Agent and Lenders that there are no outstanding Events of
Default under any Debenture other than the Existing Defaults. Borrower
acknowledges that Agent and Lenders have fully complied with their
obligations under the Debentures and that Borrowers have no defenses to
the validity, enforceability or binding effect of any of the Debentures.
10. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, and all of which, taken
together, shall constitute but one and the same agreement.
11. Recitals. Each Borrower acknowledges and agrees that the Recitals set
forth above are true and correct and are incorporated by reference
herein.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving
effect to conflicts of laws thereof.
13. Facsimile Transmission. Facsimile transmission of a signed original of
this Amendment or retransmission of any signed facsimile transmission
will be deemed the same as delivery of an original. At the request of
any other party hereto, each of the undersigned will confirm facsimile
transmission by signing a duplicate original document.
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IN WITNESS WHEREOF, the parties have executed this Amendment by their respective
duly authorized officers as of the date first above written.
AGENT:
MERCATOR ADVISORY GROUP, LLC, as Agent for Lenders
By: /s/ Signature
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Name:
-------------------------
Title: Portfolio Manager
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LENDERS:
MERCATOR MOMENTUM FUND, L.P.
By: /s/ Signature
-------------
Name:
-------------------------
Title: Portfolio Manager
-----------------
MERCATOR MOMENTUM FUND III, L.P.
By: /s/ Signature
-------------
Name:
-------------------------
Title: Portfolio Manager
-----------------
MERCATOR FOCUS FUND, L.P.
By: /s/ Signature
-------------
Name:
-------------------------
Title: Portfolio Manager
-----------------
(Signatures continued on following page)
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BORROWERS:
PRESIDION CORPORATION,
a Florida corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxxx
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Title: CEO
---
PRESIDION SOLUTIONS, INC.,
a Florida corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxxx
-------------------
Title: CEO
---
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EXHIBIT "A"
CONSENT AND AMENDMENT AGREEMENT OF GUARANTORS
This Consent and Amendment Agreement of Guarantors (this "Agreement") is made as
of May 5, 2004, by each of the undersigned (collectively, the "Guarantors" and
each, a "Guarantor"), in favor of MERCATOR MOMENTUM FUND, L.P., a California
limited partnership ("MMF"), MERCATOR MOMENTUM FUND III, L.P., a California
limited partnership ("MMFIII"), MERCATOR FOCUS FUND, L.P., a California limited
partnership ("MFF" and together with MMF and MMFIII, the "Lenders" and each of
them, a "Lender") and MERCATOR ADVISORY GROUP, LLC, as Agent for Lenders
("Agent").
RECITALS
A. Each Guarantor has executed a Payment Guaranty, dated as of February 11,
2003 (each, a "Guaranty" and collectively, the "Guaranties"), pursuant
to which such Guarantor unconditionally guaranteed to Agent, for the
benefit of the Lenders, the full payment of the Loan. All initially
capitalized terms used in this Agreement but not defined shall have the
respective meanings set forth in the Guaranties.
B. Concurrently herewith Borrowers are entering into an Amendment and
Waiver Agreement dated the date hereof with Agent and Lenders (the
"Amendment"), pursuant to which Agent and Lenders have agreed to waive
the Existing Defaults (as defined in the Amendment) and to amend certain
provisions of the Loan Documents, all as more fully set forth in the
Amendment.
C. Guarantors are entering into this Agreement to induce the Lenders to
enter into the Amendment.
AGREEMENT
NOW, THEREFORE, Guarantors, Agent and Lenders agree as follows:
1. Amendments to Guaranties. Each Guaranty is hereby amended as follows:
(a) Mercator Momentum Fund III, L.P., a California limited
partnership shall be a party to and a "Lender" under each
Guaranty. For greater certainty, the term "Lenders" shall mean,
collectively, Mercator Momentum Fund, L.P., a California limited
partnership, Mercator Momentum Fund III, L.P., a California
limited partnership, and Mercator Focus Fund, L.P., a California
limited partnership and the term "Lender" shall mean any of them.
(b) Recital "A" to each Guaranty is hereby amended and restated in
full as follows:
"A. Guarantor is executing this Guaranty to induce Lenders to
make three separate loans (defined, together in Section 2 as the
"Loan") to Presidion Corporation, formerly known as MediaBus
Networks, Inc., a Florida corporation, and Presidion Solutions,
Inc., a Florida corporation (each a
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"Borrower" and together, "Borrowers"), in the aggregate principal
amount of Two Million Dollars ($2,000,000.00)."
2. Reaffirmation of Guaranties. Each Guarantor hereby:
(a) ratifies and reaffirms all provisions, terms, covenants, and
waivers set forth in its respective Guaranty, as amended hereby
as of the date hereof; and
(b) agrees that its respective Guaranty, as amended hereby,
constitutes a valid, binding obligation of such Guarantor,
enforceable according to its terms, for which there is no offset,
counterclaim, dispute, or defense of any kind or nature.
3. Consent to Amendment. Each Guarantor hereby acknowledges it has
received copies of, and consents to, the Amendment and the documents,
instruments and agreements executed in connection therewith and agrees
that its respective Guaranty shall remain in full force and effect,
without waiver or modification (except as amended hereby),
notwithstanding the execution and performance of the Amendment and the
documents, instruments and agreements executed in connection therewith.
Each Guarantor hereby agrees that the execution of this Agreement is not
necessary for the continued validity and enforceability of its
respective Guaranty, but it is executed to induce the Lenders to enter
into the Amendment.
4. Facsimile Transmission. Facsimile transmission of a signed original of
this Agreement or retransmission of any signed facsimile transmission
will be deemed the same as delivery of an original. At the request of
the Lenders, or any of them, each of the undersigned will confirm
facsimile transmission by signing a duplicate original document.
PRESIDION SOLUTIONS, INC.,
a Florida corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
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Title: Pres / CEO
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/s/ Xxxxx X. Xxxxxxxxxx
-----------------------
XXXXX X. XXXXXXXXXX
(Signatures continued on following page)
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/s/ Xxxx X. Xxxxxxx XX
----------------------
XXXX X. XXXXXXX XX
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
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