AMENDMENT AGREEMENT
EXHIBIT
10.01
This
AMENDMENT AGREEMENT, dated as of June 2, 2006 (this “Agreement”), is entered
into by and among XXX.XXX, INC., a Delaware corporation (the “Company”),
and
LAURUS MASTER FUND, LTD., a Cayman Islands company ("Laurus").
Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in (i) that
certain Security Agreement, dated as of August 31, 2004 (as amended, modified
and supplemented from time to time, the “Security
Agreement”
and,
together with the Ancillary Agreements referred to therein, the “2004
Loan Documents”),
and
(ii)
that certain Subordination Agreement, dated as of November 2, 2005, by and
among
Laurus, as First Lien Collateral Agent and as First Lien Lender (as defined
therein), DunKnight Telecom Partners, LLC, a Delaware limited liability company,
as Second Lien Collateral Agent (as defined therein), the Second Lien Lenders
(as defined therein) (as amended, modified or supplemented from time to time,
the “Subordination
Agreement”
and,
together with the 2004 Loan Documents, the “Loan
Documents”),
as
applicable.
WHEREAS,
reference is made to the following Ancillary Agreements: (i) that
certain Secured Revolving Note, dated
as
of August 31, 2004 and issued by the Company to Laurus (as amended, modified
and/or supplemented, the “Revolving
Note”);
(ii) that
certain Secured Convertible Minimum Borrowing Note, dated
as
of August 31, 2004 and issued by the Company to Laurus (as amended, modified
and/or supplemented, the “MB
Note”)
(the
Revolving Note and the MB Note are collectively referred to herein as the
“Notes”);
WHEREAS,
Laurus has agreed effective as of the date hereof to (i) extend the Maturity
Date contained in each of the Notes and (ii) amend the Contract Rate contained
in each of the Notes, and, in consideration thereof, the Company has agreed
to
issue to Laurus one million five hundred thousand (1,500,000) unregistered,
restricted shares of the common stock of the Company (the “New
Shares”);
NOW,
THEREFORE, in consideration of the above, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
each
of the Company and Laurus agree as follows:
The
Company and Laurus hereby agree that:
1. Amended
and Restated Revolving Note.
The
Revolving Note is hereby amended and restated in the form attached hereto as
Exhibit
A
(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 1 shall be in substitution for and not in satisfaction
of the Revolving Note.
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2. Amended
and Restated MB Note.
The MB
Note is hereby amended and restated in the form attached hereto as Exhibit
B
(the
“Amended
and Restated MB Note”).
For
the avoidance of doubt, the amendment and restatement of the MB Note as set
forth in this Section 2 shall be in substitution for and not in satisfaction
of
the MB Note.
3.
New
Shares.
Immediately following the execution and delivery of this Agreement by each
of
the Company and Laurus, the Company hereby agrees to issue to Laurus the New
Shares, subject to securities laws legends applicable to transactions of this
type. Laurus hereby represents, warrants, and acknowledges to the Company that
(a) the New Shares are being acquired for the account of Laurus, for purposes
of
investment, and not with a view to the distribution thereof, as those terms
are
used in the Securities Act of 1933, as amended (the "Securities
Act"),
and
the rules and regulations promulgated thereunder; (b) Laurus has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment decision to acquire the
New
Shares pursuant to the terms of this Agreement; (c) Laurus has received copies
of such documents and such other information as it has deemed necessary in
order
to make an informed investment decision with respect to the purchase of the
New
Shares; (d) Laurus understands, and has the financial capability of assuming,
the economic risk of an investment in the New Shares for an indefinite period
of
time; and (e) no broker, agent, dealer or finder of any kind has been retained
in connection with this Agreement (and the Company shall not be responsible
for,
and Laurus shall indemnify the Company for, any compensation of any kind which
might be claimed as owing to any of such third parties.
4.
Common
Stock Sale Limitation.
Notwithstanding anything contained herein to the contrary (including, without
limitation, the provisions of Section 9 hereof), Laurus shall not be entitled
to
sell any New Shares, in whole or in part, prior to the date that is three
hundred sixty five (365) days after the date hereof (the “Lock-up
Period”).
Notwithstanding the forgoing, the Lock-up Period shall become null and void
without any notice to the Company upon the occurrence and during the continuance
of an Event of Default (as defined in any Loan Document).
5.
Effective
Date.
The
transactions contemplated hereby shall be effective as of the date first above
written (the “Effective
Date”),
when
each of the following conditions has been satisfied: (i) each of the Company
and
Laurus shall have executed, and the Company shall have delivered to Laurus
its
respective counterpart to, this Agreement, (ii) the issuance by the Company
to
Laurus of the New Shares, and the receipt by Laurus of the stock certificates
evidencing the New Shares, shall have occurred, (iii) the execution by the
Company of, and receipt by Laurus of, the Amended and Restated Revolving Note
and the Amended and Restated MB Note, and (iv) the transactions contemplated
by
Section 8, below, shall have occurred.
6.
Effect
of Amendment.
Except
as specifically set forth in this Agreement, there are no other amendments,
modifications or waivers to the Loan Documents, and all
2
of
the
other forms, terms and provisions of the Loan Documents remain in full force
and
effect. From and after the Effective Date, all references in the Loan Documents
to the Secured Revolving Note and Secured Minimum Borrowing Note shall be deemed
to be references to the Amended and Restated Secured Revolving Note and the
Amended and Restated Secured Minimum Borrowing Note, as contemplated herein.
7.
Representations
of the Company.
The
Company hereby represents and warrants to Laurus that (i) no Event of Default
(as defined in any Loan Document) exists and is continuing on the date hereof,
(ii) on the date hereof, all representations and warranties made by the Company
in the 2004 Loan Documents are in all material respects true, correct and
complete as of the date hereof as if made as of the date hereof, except for
those representations and warranties which were made as of a date certain,
which
such representations and warranties were true, correct and complete as of the
respective dates made.
8. Other
Agreements; Wavers, Consent.
Laurus
hereby acknowledges that commensurate with the parties’ execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby,
the Company will be entering into similar arrangements with DunKnight Telecom
Partners LLC and its co-investor, Knight Vision Foundation (collectively,
“DK”),
to
extend the maturity date of the Company’s outstanding debentures (the
“DK
Debentures”)
to DK
from September 4, 2006 to December 4, 2006, and, in connection therewith, the
Company will issue to DK an aggregate of 3,900,000 shares of Company common
stock (the “DK
New Shares”)
with
substantially the same rights and restrictions as are set forth herein with
respect to the New Shares (such transactions hereinafter being referred to
as
the “DK
Amendment Transactions”).
In
connection with the transactions contemplated by this Agreement and the DK
Amendment Transactions, Laurus hereby: (a) waives all economic anti-dilution
rights to which Laurus would otherwise be entitled under the MB Note and/or
the
Revolving Note arising solely as a result of the issuance of the New Shares
and
the DK New Shares, and (b) consents to the above-described extension of the
maturity date of the DK Debentures and the issuance of the DK New
Shares.
9. Piggy-Back
Registration Rights.
The
Company hereby agrees that if at any time before the New Shares may be sold
by
Laurus pursuant to Rule 144(k) promulgated under the Securities Act, there
is
not an effective registration statement covering all of the New Shares and
the
Company shall determine to prepare and file with the Securities and Exchange
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act, of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities
to
be issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to Laurus written notice of such
determination and, if within fifteen (15) days of its receipt of such notice,
Laurus so requests in writing that New Shares be included in such registration
statement, the Company shall include in such registration statement all or
any
part of such New Shares not otherwise subject to an effective registration
statement and
3
requested
by Laurus to be included in such registration statement, to the extent the
Company may do so without violating registration rights of others which exist
as
of the date of this Agreement, subject to customary underwriter cutbacks
applicable to all holders of registration rights, subject to Laurus’ delivery to
the Company of all customary representations, waivers and indemnities applicable
to selling stockholders in a registration statement. For avoidance of doubt,
the
registration rights provided to Laurus hereunder will rank pari
passu
with the
registration rights to be provided by the Company to DK in respect to the DK
New
Shares to be issued by the Company as contemplated by Section 9
hereof.
10.
Form
8-K.
The
Company hereby agrees to file a Current Report on Form 8-K, completed as
appropriate, with the Securities and Exchange Commission disclosing the terms
and conditions set forth in this Agreement as soon as practicable, but no later
than the fourth (4th)
business day following the date hereof.
11.
Binding
Effect.
This
Agreement shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of and be
enforce-able by each of the parties hereto and its successors and permitted
assigns. THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAW OF THE STATE OF NEW YORK.
This
Agreement 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 of
the Company and Laurus has caused this Agreement signed in its name effective
as
of the date first above written.
XXX.XXX,
INC.
By:
/s/
Xxxxx X.
Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
President & CEO
LAURUS
MASTER FUND, LTD.
By:
/s/
Xxxxx
Grin
Name:
Xxxxx Grin
Title:
Director
Agreed
and acknowledged:
DUNKNIGHT
TELECOM PARTNERS
LLC,
as
Second
Lien Collateral Agent, pursuant to the Subordination
Agreement
By:
/s/
Xxxx
Xxxxxxxxxxx
Name:
Xxxx Xxxxxxxxxxx
Title:
Manager
5
EXHIBIT
A
Form
of Amended and Restated Revolving Note
6
EXHIBIT
B
Form
of Amended and Restated MB Note
7
