AMENDMENT TO SECURITY AGREEMENT
Exhibit
10.5
AMENDMENT
TO
This
AMENDMENT (this “Amendment”), dated as of
December 11, 2009, is made by and among the grantors listed on the signature
pages hereof (collectively, jointly and severally, the “Grantors” and each,
individually, a “Grantor”), and the secured
parties listed on the signature pages hereof (collectively, the “Secured Parties” and each,
individually, a “Secured
Party”).
RECITALS
WHEREAS, the Grantors and the
Secured Parties entered into that certain Security Agreement dated as of August
29, 2008 (as amended hereby and as amended, restated, supplemented, or otherwise
modified from time to time, including all schedules thereto, the “Agreement”); and
WHEREAS, in connection with
those certain separate Exchange Agreements, each dated as of December 11, 2009,
by and between Parent (as defined in the Agreement), and each of the Secured
Parties, the Grantors and the Secured Parties hereto desire to amend certain
provisions of the Agreement.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1.
Amendment of
Recitals. The recitals to the Agreement are hereby deleted and replaced
with the following:
WHEREAS, pursuant to the
Exchange Agreements (as defined below), Parent has agreed to exchange each
Secured Party’s Special Warrant (as defined in the Exchange Agreements) and 2007
Warrant (as defined in the Exchange Agreements) for a 2008 Note (as defined in
the 2009 Exchange Agreements) and a Warrant (as defined in the Exchange
Agreements);
WHEREAS, each Grantor other
than Parent is a direct or indirect wholly-owned subsidiary of Parent and will
receive direct and substantial benefits from such exchanges; and
WHEREAS, in order to induce
each Secured Party to so exchange its Special Warrant and 0000 Xxxxxxx for a
2008 Note and a Warrant, as provided for in the Exchange Agreements, Grantors
have agreed to grant a continuing security interest in and to the Collateral in
order to secure the prompt and complete payment, observance and performance of
the Secured Obligations.
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2.
Amendment of Defined
Terms.
(a) The
defined term “Exchange Agreements” is hereby deleted and replaced with the
following:
“Exchange Agreements”
means those certain separate Exchange Agreements, dated as of August 29, 2008,
by and between Parent and each of the Secured Parties, as may be amended,
restated, supplemented or otherwise modified from time to time.
(b) The
defined term “Notes” is hereby deleted and replaced with the
following:
“Notes” means the 2009
Notes (as defined in the 2009 Exchange Agreements).
(c) The
defined term “Parent” is hereby deleted and replaced with the
following:
“Parent” means
WORKSTREAM INC., a corporation existing pursuant to the Canada Business
Corporations Act.
(d) The terms
“Special Warrant” and “Warrant” are hereby deleted from Section 1 of the
Agreement.
(e) The
following terms are hereby added to Section 1 of the Agreement:
“2008 Notes” has the
meaning specified therefor in the 2009 Exchange Agreements.
“2009 Exchange
Agreements” means those certain separate Exchange Agreements, dated as of
December 11, 2009, by and between Parent and each of the Secured Parties, as may
be amended, restated, supplemented or otherwise modified from time to
time.
(f) The
defined term “Transaction Documents” is hereby deleted and replaced with the
following:
“Transaction
Documents” means, collectively, the Transaction Documents (as defined in
the Transaction Agreement (as defined in the Notes)), the Exchange Documents (as
defined in the 2008 Exchange Agreements) and, for clarification purposes, the
Notes, all as may be amended, restated, supplemented or otherwise modified from
time to time.
(g) The
period at the end of the defined terms “Control Agreement,” “Copyright Security
Agreement,” “Guaranties,” “Patent Security Agreement,” “Pledged Operating
Agreements,” “Pledged Partnership Agreements,” “Security Documents,” and
“Trademark Security Agreement” is hereby deleted and replaced with the
following:
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“, as may
be amended, restated, supplemented or otherwise modified from time to
time.”
3.
Other Amendments. The
word “TO” is hereby inserted after the word “HAVE” in the last sentence of
Section 25 of the Agreement.
4.
Miscellaneous.
(a) No waiver
of any provision of this Amendment, and no consent to any departure by any of
Grantors herefrom, shall in any event be effective unless the same shall be in
writing and signed by each Secured Party, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given. No amendment of any provision of this Amendment shall be effective
unless the same shall be in writing and signed by each Secured Party and each
Grantor to which such amendment applies.
(b) All
questions concerning the construction, validity, enforcement and interpretation
of this Amendment shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago,
Illinois for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under the Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Without limitation of the foregoing, each Grantor (other than
Parent) hereby irrevocably appoints Parent as such Grantor’s agent for purposes
of receiving and accepting any service of process hereunder. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AMENDMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(c) Except as
otherwise expressly provided herein, (i) the Agreement and each other
Transaction Document (including, without limitation, each other Security
Document and each Guaranty) is, and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects, except that on and
after the date hereof (A) all references in the Agreement to the “Security
Agreement,” “hereto,” “hereof,” “this Agreement,” “hereunder” or words of like
import referring to the Agreement shall mean the Agreement as amended by this
Amendment and (B) all references in the other Transaction Documents
(including, without limitation, each other Security Document and each Guaranty)
to the “Security Agreement,” “thereto,” “thereof,” “thereunder” or words of like
import referring to the Security Agreement shall mean the Security Agreement as
amended by this Amendment; and (ii) the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment, modification,
impairment or waiver of, or a forbearance with respect to, or otherwise affect
in any manner, any right, power or remedy of any Secured Party under the
Agreement or any other Transaction Document (including, without limitation, each
other Security Document and each Guaranty), nor constitute an amendment,
modification, impairment or waiver of, or a forbearance with respect to, nor
otherwise affect in any manner, any provision of the Agreement or any
Transaction Document (including, without limitation, each other Security
Document and each Guaranty) and all of them shall continue in full force and
effect, as amended or modified by this Amendment. This Amendment (1) shall
not prejudice, restrict or affect any right or rights which any of the Secured
Parties may now have or may have in the future under or in connection with the
Agreement or any of the other Transaction Documents (including, without
limitation, each other Security Document and each Guaranty) and (2) is not a
novation nor is it to be construed as a release of the security interest granted
under the Agreement, which grant continues in full force and effect and
continues to secure the Secured Obligations and such security interest
continues to be first in priority.
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(d) This
Amendment may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same agreement. Delivery of an executed counterpart
of this Amendment by facsimile or other electronic method of transmission shall
be equally as effective as delivery of an original executed counterpart of this
Amendment. Any party delivering an executed counterpart of this Amendment by
facsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Amendment but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
(e) Any
provision of this Amendment which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction.
Headings used in this Amendment are for convenience only and shall not be used
in connection with the interpretation of any provision hereof. The pronouns used
herein shall include, when appropriate, either gender and both singular and
plural, and the grammatical construction of sentences shall conform thereto. The
language used in this Amendment will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.
(f) Unless
the context of this Amendment or any other Transaction Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are
not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Amendment
refer to this Amendment as a whole and not to any particular provision of this
Amendment. Section, subsection, clause, schedule, and exhibit references herein
are to this Amendment unless otherwise specified. Any reference in this
Amendment to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to
any Person (as defined in the Agreement) shall be construed to include such
Person’s successors and assigns.
[signature pages
follow]
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IN
WITNESS WHEREOF, the undersigned parties hereto have executed this Amendment by
and through their duly authorized officers, as of the day and year first above
written.
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GRANTORS:
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WORKSTREAM
INC., a corporation existing pursuant to the Canada Business Corporations
Act
By: /s/
Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: CEO
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0XXXXXXXXXX.XXX,
INC., a Delaware corporation
By: /s/
Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Title: CEO
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WORKSTREAM
USA, INC., a Delaware corporation
By:
/s/ Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Title: CEO
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XXXXX
XXXXX HOLDINGS, INC., a Florida corporation
By:
/s/ Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Title: CEO
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THE
OMNI PARTNERS, INC., a Florida corporation
By:
/s/ Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Title: CEO
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WORKSTREAM
MERGER SUB INC., a Delaware corporation
By: /s/
Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Title: CEO
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SECURED
PARTIES:
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MAGNETAR
CAPITAL MASTER FUND, LTD
By: Magnetar
Financial LLC
Its:
Investment Manager
/s/______________________________
By:
Its:
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SECURED
PARTIES:
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CCM
MASTER QUALIFIED FUND, LTD.
By:
/s/
Name:
Title:
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SECURED
PARTIES:
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CRESTVIEW
CAPITAL MASTER, LLC
By: Crestview
Capital Partners, LLC, its sole manager
By:
/s/
Name:
Title:
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SECURED
PARTIES:
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TALKOT
FUND
By:
/s/
Name:
Title:
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SECURED
PARTIES:
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XXXXXX
X. XXXX INDIVIDUAL XXX ACCOUNT
By:
/s/
Name:
Title:
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SECURED
PARTIES:
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CARPE
DIEM PARTNERS LLC, as an assignee and a transferee of each of SRB GREENWAY
OPPORTUNITY FUND QP, L.P., SRB GREENWAY OPPORTUNITY FUND, L.P.,
SRB GREENWAY CAPITAL, QP L.P., SRB GREENWAY CAPITAL, L.P. and SRB GREENWAY
OFFSHORE OPERATING FUND, L.P.
By: Carpe
Diem Capital LLC
Its: Investment
Manager
By:
/s/
Name: Xxxx X.
Xxxxxxxxx
Title:
President
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