Contract
Exhibit
4.2
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR (B) AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
THIS
NOTE IS REGISTERED WITH THE AGENT PURSUANT TO SECTION 24(B) OF THE SECURITY
AGREEMENT (AS DEFINED BELOW). TRANSFER OF ALL OR ANY PORTION OF THIS
NOTE IS PERMITTED SUBJECT TO THE PROVISIONS SET FORTH IN SUCH SECTION 24(B)
WHICH REQUIRE, AMONG OTHER THINGS, THAT NO TRANSFER IS EFFECTIVE UNTIL THE
TRANSFEREE IS REFLECTED AS SUCH ON THE REGISTRY MAINTAINED WITH THE AGENT
PURSUANT TO SUCH SECTION 24(B).
SECURED TERM A
NOTE
FOR VALUE
RECEIVED, each of Rapid Link, Inc., a Delaware corporation (the “Parent”), and the other
companies listed on Exhibit A attached
hereto (such other companies together with the Parent, each a “Company” and collectively, the
“Companies”), hereby,
jointly and severally, promises to pay to Valens Offshore SPV II, Corp. (the
“Holder”) or its
registered assigns or successors in interest, the sum of One Million Eight
Hundred Thousand Dollars ($1,800,000), together with any accrued and unpaid
interest hereon, on March 31, 2011 (the “Maturity Date”) if not sooner
indefeasibly paid in full.
Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in that certain Security Agreement dated as of the date hereof (as
amended, restated, modified and/or supplemented from time to time, the “Security Agreement”) among the
Companies, the Holder, each other Lender and LV Administrative Services, Inc.,
as administrative and collateral agent for the Lenders (the “Agent” together with the
Lenders, collectively, the “Creditor
Parties”).
43.
CONTRACT
RATE AND AMORTIZATION
(a) Contract
Rate. Subject to Sections 2.2 and 3.9, interest payable on the
outstanding principal amount of this Note (the “Principal Amount”) shall
accrue at a rate per annum equal to ten percent (10%) (the “Contract
Rate”). Interest shall be (i) calculated on the basis of a 360
day year, and (ii) payable monthly, in arrears, commencing on April 1, 2008, on
the first business day of each consecutive calendar month thereafter through and
including the Maturity Date, and on the Maturity Date, whether by acceleration
or otherwise.
(b) Principal
Payments. Amortizing payments of the Principal Amount shall be
made, jointly and severally, by the Companies commencing on October 1, 2009 and
on the first business day of each succeeding month thereafter through and
including the Maturity Date (each, an “Amortization
Date”). Subject to Article III below, commencing on the first
Amortization Date, the Companies shall make, jointly and severally, monthly
payments to the Holder on each Amortization Date, each such payment in the
amount of $85,000 together with any accrued and unpaid interest on such portion
of the Principal Amount plus any and all other unpaid amounts which are then
owing to the Holder under this Note, the Security Agreement and/or any other
Ancillary Agreement (collectively, the “Monthly
Amount”). Any outstanding Principal Amount together with any
accrued and unpaid interest and any and all other unpaid amounts which are then
owing by the Companies to the Holder under this Note, the Security Agreement
and/or any other Ancillary Agreement shall be due and payable on the Maturity
Date.
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(c) Optional Redemption in
Cash. The Companies may prepay this Note in full (“Optional Redemption”) by
paying to the Holder a sum of money equal to one hundred ten percent (110%) of
the Principal Amount outstanding at such time together with accrued but unpaid
interest thereon and any and all other sums due, accrued or payable to the
Holder arising under this Note, the Security Agreement or any other Ancillary
Agreement (the “Redemption
Amount”) outstanding on the Redemption Payment Date (as defined
below). The Companies shall deliver to the Holder a written notice of
redemption (the “Notice of
Redemption”) specifying the date for such Optional Redemption (the “Redemption Payment Date”),
which date shall be ten (10) business days after the date of the Notice of
Redemption (the “Redemption
Period”). On the Redemption Payment Date, the Redemption
Amount must be paid in good funds to the Holder. In the event the
Companies fail to pay the Redemption Amount on the Redemption Payment Date as
set forth herein, then such Redemption Notice will be null and
void. In the event that the Redemption Amount is paid to the Holder
within six (6) months of the date of issue of this Note, upon receipt in full of
the Redemption Amount in good funds, the Holder will rebate to Companies fifty
percent (50%) of any fees it received from the Companies on the date of issue of
this Note. If any Secured Term A Notes issued pursuant to the
Security Agreement, in addition to this Note, are outstanding (collectively, the
“Outstanding Secured Term A
Notes”) and the Companies pursuant to this Section 1.4 elect to make an
Optional Redemption, then the Companies shall take the same action with respect
to all Outstanding Secured Term A Notes and make such payments to all holders of
Outstanding Secured Term A Notes on a pro rata basis based upon the Redemption
Amount of each Outstanding Secured Term A Note.
44.
EVENTS OF
DEFAULT
(a) Events of
Default. The occurrence of any Event of Default under the
Security Agreement shall constitute an event of default (“Event of Default”)
hereunder.
(b) Default
Interest. Following the occurrence and during the continuance
of an Event of Default, each Company shall, jointly and severally, pay interest
on the outstanding principal balance of this Note in an amount equal to twenty
four percent (24%) per annum beginning on the first date of such Event of
Default, and all outstanding obligations under this Note, the Security Agreement
and each other Ancillary Agreement, including unpaid interest, shall continue to
accrue interest at such interest rate from the date of such Event of Default
until the date such Event of Default is cured or waived.
2
(c) Default
Payment. Following the occurrence and during the continuance
of an Event of Default, the Agent may demand repayment in full of all
obligations and liabilities owing by the Companies to the Holder under this
Note, the Security Agreement and/or any other Ancillary Agreement and/or may
elect, in addition to all rights and remedies of the Agent under the Security
Agreement and the other Ancillary Agreements and all obligations and liabilities
of each Company under the Security Agreement and the other Ancillary Agreements,
to require the Companies, jointly and severally, to make a Default Payment
(“Default
Payment”). The Default Payment shall be one hundred ten
percent (110%) of the outstanding principal amount of this Note, plus accrued
but unpaid interest, all other fees then remaining unpaid, and all other amounts
payable hereunder. Subject to the last sentence of Section 18 of the
Security Agreement, the Default Payment shall be due and payable immediately on
the date that the Agent has demanded payment of the Default Payment pursuant to
this Section 2.3.
45.
MISCELLANEOUS
(a) Cumulative
Remedies. The remedies under this Note shall be
cumulative.
(b) Failure or Indulgence Not
Waiver. No failure or delay on the part of the Holder hereof
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
(c) Notices. Any
notice herein required or permitted to be given shall be given in writing in
accordance with the terms of the Security Agreement.
(d) Amendment
Provision. The term “Note” and all references
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument may be
amended or supplemented.
(e) Assignability. This
Note shall be binding upon each Company and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and assigns, and may
be assigned by the Holder in accordance with the requirements of the Security
Agreement. No Company may assign any of its obligations under this
Note without the prior written consent of the Holder, any such purported
assignment without such consent being null and void.
(f) Cost of
Collection. In case of the occurrence of an Event of Default
under this Note, the Companies shall, jointly and severally, pay the Holder the
Holder’s reasonable costs of collection, including reasonable attorneys’
fees.
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(g) Governing Law, Jurisdiction
and Waiver of Jury Trial.
(i)
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
(ii)
EACH COMPANY HEREBY CONSENTS AND AGREES THAT THE
STATE AND/OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN ANY COMPANY, ON THE ONE HAND, AND THE HOLDER AND/OR ANY OTHER CREDITOR
PARTY, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER ANCILLARY
AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR ANY OF THE
ANCILLARY AGREEMENTS; PROVIDED, THAT EACH
COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT
NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER AND/OR
ANY OTHER CREDITOR PARTY FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE HOLDER AND/OR ANY OTHER CREDITOR PARTY. EACH
COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON
CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE PARENT AT THE ADDRESS SET FORTH IN
THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE EARLIER OF THE PARENT’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
(iii) EACH
COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND/OR OF ARBITRATION, EACH COMPANY HERETO
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER AND/OR ANY OTHER CREDITOR PARTY, ON THE ONE HAND, AND ANY COMPANY, ON THE
OTHER HAND, ON THE ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER
ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR
THERETO.
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(h) Severability. In
the event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this
Note.
(i)
Maximum
Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges hereunder exceed the
maximum rate permitted by such law, any payments in excess of such maximum rate
shall be credited against amounts owed by the Companies to the Holder and thus
refunded to the Companies.
(j)
Security
Interest. The Agent, for the ratable benefit of the Creditor
Parties, has been granted a security interest in certain assets of the Companies
as more fully described in the Security Agreement and the other Ancillary
Agreements.
(k) Construction;
Counterparts. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other. This Note may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which when taken together shall constitute one and the same
instrument. Any signature delivered by a party by facsimile or
electronic transmission shall be deemed to be an original signature
hereto.
(l)
Registered
Obligation. This Note shall be registered (and such registration shall
thereafter be maintained) as set forth in Section 24(b) of the Security
Agreement. Notwithstanding any document, instrument or agreement
relating to this Note to the contrary, transfer of this Note (or the right to
any payments of principal or stated interest thereunder) may only be effected by
(i) surrender of this Note and either the reissuance by the Companies of this
Note to the new holder or the issuance by the Companies of a new instrument to
the new holder or (ii) registration of such holder as an assignee in accordance
with Section 24(b) of the Security Agreement.
[Balance
of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, each
Company has caused this Secured Term A Note to be signed in its name effective
as of this 31st day of March, 2008.
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RAPID
LINK, INCORPORATED
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By:
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Name:
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Title:
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WITNESS:
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TELENATIONAL
COMMUNICATIONS, INC.
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By:
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Name:
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Title:
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WITNESS:
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ONE
RING NETWORKS, INC.
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By:
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Name:
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||||
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Title:
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WITNESS:
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6
EXHIBIT
A
OTHER
COMPANIES
Telenational
Communications, Inc.
One Ring
Networks, Inc.
7
