EXHIBIT 10.1
Omnibus Agreement regarding Series 1 Convertible Subordinated Promissory Notes
This Omnibus Agreement re Series 1 Convertible Subordinated Promissory Notes
(this "Agreement") is entered into as of September 1, 2004 by and between
BrightStar Information Technology Group, Inc., a Delaware corporation
("BrightStar"), BrightStar Information Technology Services, Inc., a Delaware
corporation (the "Company"), and each of the holders of the Notes (as defined
below) (each a "Holder" and, collectively, the "Holders").
P R E A M B L E
Whereas, the Company initially issued to the Holders its Series 1 Convertible
Subordinated Promissory Notes dated July 26, 2001 (as amended by amendments
dated as of October 14, 2003 and June 30, 2004 by and between the Company and
holders of Series 1 Convertible Subordinated Promissory Notes representing in
aggregate outstanding principal amount not less than seventy-five percent (75%)
of the aggregate outstanding principal amount of all Series 1 Convertible
Subordinated Promissory Notes then outstanding, and including those Series 1
Convertible Subordinated Promissory Notes issued to Holders as payment in kind
for interest, the "Notes"); and
Whereas, the Notes are secured pursuant to that certain Security Agreement dated
as of July 26, 2001, made by BrightStar and others; and
Whereas, BrightStar proposes to transfer substantially all of its assets to the
Holders by way of the transfer to each Holder of a percentage of common stock in
a corporation or a percentage membership interest in a limited liability company
that would own such assets equal to the percentage of the aggregate principal
amount outstanding under all of the Notes represented by the Note(s) of such
Holder (the "Asset Transfer"), including but not limited to all of the issued
and outstanding capital stock of the Company, in exchange for a release of the
lien and security interest encumbering the assets of BrightStar created pursuant
to the Security Agreement, a release of and any and all other claims of any
nature that such Holders may have against BrightStar, and certain other
agreements by the Holders, all upon the terms and conditions set forth herein;
and
Whereas, the Company and the Holders desire to extend the due date of certain
payments under the Notes, regardless of whether the Asset Transfer is carried
out;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Holders hereby
agree as follows:
1. AGREEMENTS OF HOLDERS EFFECTIVE UPON COMPLETION OF ASSET TRANSFER.
Effective upon the satisfaction of the conditions set forth in Section
2 hereof (the "Effective Time"), on or before February 28, 2005 (the
"Termination Date," which may be extended from time to time by the
written consent of Holders of Notes representing in aggregate
outstanding principal amount more than fifty percent (50%) of the
aggregate outstanding principal amount of all Notes), and without
further action on the part of the Holders, each of the Holders hereby:
a. releases BrightStar from any and all liability or obligation
whatsoever in respect of any of the Notes, the Security Agreement
or any other document or agreement related thereto, or in respect
of any other matter of any nature arising on or prior to the
Effective Time, releases all liens and security interests
encumbering assets of BrightStar and securing payment of the
Notes, and agrees that BrightStar shall no longer be a "Debtor"
under the Security Agreement.
b. agrees that all warrants issued to such Holder in connection with
the Notes are cancelled and of no further force or effect.
c. agrees that Sections 5 through 12, and clauses (b), (c) and (d)
of Section 13 of the Notes, shall be deleted from the Notes in
their entirety.
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Upon request by BrightStar or the Company, each Holder, at no
expense to such Holder, agrees to execute and deliver any and all
further documents necessary or appropriate to further confirm and
assure the effectiveness and completion of the actions described
in clauses a, b and c above and otherwise to carry out the intent
and purposes of this Agreement, including, without limitation,
the execution of termination statements under the Uniform
Commercial Code and the return to BrightStar of all warrants
issued to such Holder in connection with the Notes.
2. CONDITIONS TO EFFECTIVENESS. The agreements of the Holders set forth
in clauses a, b and c, of Section 1 above shall be effective only upon
the satisfaction of the following conditions on or before the
Termination Date:
a. The stockholders of BrightStar shall have approved the Asset
Transfer; and
b. The Asset Transfer shall have been completed.
3. UNCONDITIONAL AMENDMENT OF NOTES. The Notes are hereby amended so that
the date of the payments under the Notes and PIK Notes in respect of
the periods ending September 30, 2004 and December 31, 2004 shall be
extended to December 31, 2005.
4. REPRESENTATIONS AND WARRANTIES OF BRIGHTSTAR. BrightStar represents
and warrants to each of the Holders as follows:
a. It is a corporation validly existing under the laws of the State
of Delaware and has the corporate power to own its assets and to
conduct its business as presently conducted.
b. Upon approval of the Asset Transfer by the stockholders of
BrightStar, the transaction contemplated by this Agreement,
including the Asset Transfer, will be duly authorized on the part
of BrightStar.
c. BrightStar's Form 10-K and Form 10-Q reports filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
since December 31, 2002, are substantially in compliance with the
requirements of the Exchange Act, and no statement contained
therein contains any untrue statement of a material fact or omits
to state any material fact known to BrightStar necessary to make
the statements contained therein and therein not misleading.
d. BrightStar's projections of financial performance of the Company
in future periods which have been furnished to the Ad Hoc
Committee of Note Holders were prepared in good faith by
BrightStar based on assumptions believed by BrightStar to be
reasonable when made.
5. DISCLAIMER. Each Holder executing this Agreement is doing so based
solely on the representations and warranties set forth in Section 4
above and the independent determination of such Holder. Except for the
representations and warranties set forth in Section 4 above, no Holder
is relying in any way on statements made by or on behalf of
BrightStar, whether made by directors or officers of BrightStar, by
members of the Ad Hoc Committee of Note Holders, or by any party
acting as a consultant, advisor or attorney for BrightStar. Each
Holder recognizes that any and all projections of financial
performance of the Company in future periods which have been furnished
to Holders are predictions of future events and thus inherently
uncertain, and actual financial performance will differ from such
projections. In no event shall any individual have any obligation or
liability to any Holder associated with the Notes, the obligations of
BrightStar or the Company under the Notes, or the transaction
contemplated by this Agreement.
6. EFFECTIVENESS. This Agreement shall become effective upon execution
hereof by the Company and by Holders whose Notes represent in total
seventy-five percent (75%) of the aggregate outstanding principal
amount of the Notes.
7. ACKNOWLEDGEMENT AND CONSENT OF COMPANY. The Company acknowledges the
continuation of its obligations under the Notes and the Security
Agreement. The Company consents to the transactions contemplated by
this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this amendment as of the date
first written above.
BrightStar Information Technology Group, Inc.
By
-------------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
Name of Holder:
BrightStar Information Technology Services, Inc.
By By
---------------------------- -------------------------------
Xxxxxx X. Xxxxx
Name: Chief Executive Officer
------------------------
Title:
------------------------
Consent of Other Debtors under Security Agreement
Each of the undersigned consents to the completion of each of the transactions
contemplated by the foregoing Omnibus Agreement re Series 1 Convertible
Subordinated Promissory Notes, and acknowledges that property belonging to each
of the undersigned will remain subject to liens and security interests to the
extent set forth in the Security Agreement (as defined in the foregoing
Agreement).
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of
the date and year first above written.
INTEGRATED CONTROLS, INC.
By
--------------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
"DEBTOR"
SOFTWARE CONSULTING SERVICES AMERICA, INC.
By
--------------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
"DEBTOR"
SOFTWARE INNOVATORS, INC.
By
--------------------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
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