EXHIBIT 10.38
AMENDMENT NO. 2 TO LOAN AND NOTE PURCHASE AGREEMENT
Amendment No. 2 to Loan and Note Purchase Agreement (the "Amendment")
is entered into as of this 5 day of April, 2000 by and among eGlobe, Inc., a
Delaware corporation ("Parent"), eGlobe Financing Corporation, a Delaware
corporation ("eGlobe Financing"), IDX Financing Corporation, a Delaware
corporation ("IDX Financing"), Telekey Financing Corporation, a Delaware
corporation ("Telekey Financing" and together with eGlobe Financing and IDX
Financing, the "Financing Companies"), eGlobe/Coast, Inc., a Delaware
corporation ("eGlobe/Coast") and EXTL Investors, LLC, a Nevada limited liability
corporation ("EXTL Investors").
WHEREAS, Parent, the Financing Companies and EXTL Investors entered
into a Loan and Note Purchase Agreement dated April 9, 1999, as amended by a
letter agreement dated June 16, 1999 and as further amended by Amendment No. 1
to Loan and Note Purchase Agreement dated as of June 30, 1999 (collectively, the
"Note Purchase Agreement"), pursuant to which the Financing Companies originally
borrowed $20 million from EXTL Investors as evidenced by a certain 5% secured
note dated as of June 30, 1999 (the "Secured Notes") and a certain revolving
note dated as of June 30, 1999 based on the balance of accounts receivable (the
"A/R Note");
WHEREAS, as prepayment (the "Prepayment") of $4 million under the
Secured Notes, Parent issued to EXTL Investors 40 shares of its 6% Series J
Cumulative Convertible Preferred Stock and appropriate notations were made on
the Secured Notes reflecting such Prepayment;
WHEREAS, on December 2, 1999, Coast International, Inc. ("Coast")
merged with and into eGlobe/Coast pursuant to the terms of an Agreement and Plan
of Merger dated November 29, 1999 among Parent, eGlobe/Coast, Coast and the
stockholders of Coast, as a result of which eGlobe/Coast was the surviving
company and remained a wholly owned subsidiary of Parent (the "Coast Merger");
WHEREAS, prior to the Coast Merger and pursuant to a certain Revolving
Credit Note Agreement dated March 5, 1999, Special Investment Risks, LLC, Nevada
limited liability company ("Special Investment") has lent to Coast an aggregate
principal amount of $3,250,000 as evidenced by a promissory note, a copy of
which is attached hereto as Exhibit A ("Special Investment Note");
WHEREAS, in connection with the consummation of the Coast Merger,
eGlobe/Coast assumed Coast's obligations to repay all amounts due and payable
under the Special Investment Note, whether at maturity, by acceleration or
otherwise, in accordance with the terms of the Special Investment Note;
WHEREAS, EXTL Investors and Special Investment are each affiliates of
Xxxxxx Xxxxxx;
WHEREAS, EXTL Investors has consented to eGlobe/Coast's assumption of
the obligations under the Special Investment Note and has agreed to permit
Parent and the Financing Companies to guarantee the Special Investment Note and
to secure such guarantee and to waive its rights to require Parent to cause
eGlobe/Coast to convey to one of the Financing Companies the assets described in
Exhibit G-2 of the Note Purchase Agreement on the condition that eGlobe/Coast
guarantee repayment of the Secured Notes and the A/R Note and secure such
guarantee as hereinafter set forth; and
WHEREAS, the parties desire to make certain amendments to the Note
Purchase Agreement intended to give the Special Investment Note the full benefit
of certain of the security arrangements contained therein and in the security
agreements and other documents referred to therein and to further secure the
Secured Notes and the A/R Note.
NOW THEREFORE, the parties hereto do hereby agree as follows:
1. Capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Note Purchase Agreement. All terms and
provisions of the Note Purchase Agreement, as amended hereby, shall continue in
full force and effect, and are hereby confirmed in all respects.
2. EXTL Investors hereby acknowledges that in connection with the
Coast Merger that eGlobe/Coast assumed Coast's obligations to repay all amounts
due and payable under the Special Investment Note, whether at maturity, by
acceleration or otherwise, in accordance with the terms of the Special
Investment Note and hereby consents to such assumption. EXTL Investors hereby
consents to (i) Parent and the Financing Companies guaranteeing repayment of the
Special Investment Note, (ii) the Financing Companies granting a security
interest to Special Investment in the assets described in Exhibit G-1 of the
Note Purchase Agreement and (iii) eGlobe/Coast granting a security interest to
Special Investment in the assets described in Exhibit G-2 of the Note Purchase
Agreement.
3. EXTL Investors hereby waives its right under Section 1.2(f) of the
Note Purchase Agreement to require Parent to convey or cause its subsidiaries to
convey to the Financing Companies, during the period in which the Secured Notes
and the A/R Note are outstanding, the assets acquired in the Coast Merger and
which are described in Exhibit G-2 of the Note Purchase Agreement.
4. eGlobe/Coast shall guarantee the repayment of the Secured Notes and
the A/R Note by entering into a Guaranty (the "eGlobe/Coast Guaranty")
substantially in the form attached hereto as Exhibit B for the benefit of EXTL
Investors.
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5. eGlobe/Coast shall grant a security interest in those of its assets
which are described in Exhibit G-2 of the Note Purchase Agreement to each of
EXTL Investors and Special Investment (collectively, the "Investors") in
proportion to all amounts due and payable under each of the Secured Notes, the
A/R Note and the Special Investment Note by entering into a Security Agreement
(the "eGlobe/Coast Security Agreement") substantially in the form attached
hereto as Exhibit C. In the event that any of eGlobe/Coast's assets described in
Exhibit G-2 of the Note Purchase Agreement are already encumbered by an
Encumbrance that is not prohibited under the Note Purchase Agreement, it is
intended that the Investors would receive a second priority security interest in
such assets to the extent permitted by the documents evidencing the first
security interest, and eGlobe/Coast and the Parent agree to use all reasonable
efforts to obtain such consents as may be necessary from the holders of such
first security interests to allow a second security interest to be placed on
such assets for the benefit of the Investors.
6. Parent and the Financing Companies shall guarantee the repayment of
the Special Investment Note by entering into a Guaranty (the "eGlobe Guaranty")
substantially in the form attached hereto as Exhibit D for the benefit of
Special Investment.
7. The Financing Companies shall grant a security interest in those of
their assets which are described in Exhibit G-1 of the Note Purchase Agreement
to EXTL Investors and Special Investment in proportion to all amounts due and
payable under each of the Secured Notes, the A/R Note and the eGlobe Guaranty by
amending and restating the Security Agreement substantially in the form attached
hereto as Exhibit E.
8. This Amendment No. 2 to Loan and Note Purchase Agreement may be
executed in several counterparts, each of which is an original, but all of which
together constitute one and the same agreement.
9. All corporate law matters arising under this Amendment No. 2 to
Loan and Note Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, and all other matters arising
under this Agreement shall be governed by and construed in accordance with the
laws of the State of Texas, in each case regardless of the laws that might
otherwise govern under applicable principles of conflicts of law. Each of the
parties consents to the jurisdiction of the federal courts whose districts
encompass any part of the State of Texas or the state courts of the State of
Texas in connection with any dispute arising under this Amendment No. 2 to Loan
and Note Purchase Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens, to
the bringing of any such proceeding in such jurisdictions.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
EGLOBE, INC.
By:
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Name/Title:
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EGLOBE FINANCING CORPORATION
By:
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Name/Title:
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IDX FINANCING CORPORATION
By:
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Name/Title:
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TELEKEY FINANCING CORPORATION
By:
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Name/Title:
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EGLOBE/COAST, INC.
By:
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Name/Title:
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EXTL INVESTORS, LLC
By:
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Name/Title:
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