Contract
LV
ADMINISTRATIVE SERVICES, INC.
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
April 15,
2009
ProLink
Solutions, LLC
000
Xxxxxx Xxxx
Xxxxxxxx,
XX 00000
Attention: Xxxxxxxx
Xxxx, Chief Executive Officer
Ladies
and Gentlemen:
Reference
is hereby made to (a) that certain Second Amended and Restated Security
Agreement dated as of September __, 2008 by and among ProLink Holdings Corp., a
Delaware corporation (“Parent”), ProLink
Solutions, LLC, a Delaware limited liability company (“Solutions”) (Parent
and Solutions, each a “Company” and
collectively, the “Companies”), LV
Administrative Services, Inc., as Administrative and Collateral Agent (“Agent”), Valens U.S.
SPV I, LLC (“Valens
U.S.”), Valens Offshore SPV I, LTD (“Valens Offshore”),
PSource Structured Debt Limited (“PSource”) and
Calliope Capital Corporation (“Calliope” and
collectively with Valens U.S., Valens Offshore and PSource, the “Lenders”; and the
Lenders, collectively with Agent, the “Creditor Parties”)
(as amended, restated, modified and/or supplemented from time to time, the
“Security
Agreement”), (b) that certain Secured Term Note dated March 4, 2009
from the Companies in favor of Valens U.S. in the original principal amount of
$1,400,000.00 (as amended, restated, modified and/or supplemented from time to
time, the “Secured
Term Note”), (c) that certain Amended and Restated Secured
Convertible Term Note signed March 31, 2008 from the Companies in favor of
Valens U.S. in the original principal amount of $1,465,325.27 (as amended,
restated, modified and/or supplemented from time to time, the “Valens U.S. Convertible
Note”), (d) that certain Amended and Restated Secured Convertible
Term Note signed March 31, 2008 from the Companies in favor of Valens Offshore
in the original principal amount of $2,298,374.73 (as amended, restated,
modified and/or supplemented from time to time, the “Valens Offshore Convertible
Note”), (e) that certain Amended and Restated Secured Convertible
Term Note signed March 31, 2008 from the Companies in favor of PSource in the
original principal amount of $2,336,300.00 (as amended, restated, modified
and/or supplemented from time to time, the “PSource Convertible
Note,” and collectively with the Valens U.S. Convertible Note and the
Valens Offshore Convertible Note, the “Convertible Notes”),
(f) that certain Second Amended and Restated Secured Revolving Note signed March
31, 2008 from the Companies in favor of Calliope in the original principal
amount of $6,000,000 (as amended, restated, modified and/or supplemented from
time to time, the “Revolving Credit
Note”) and (g) that certain Common Stock Purchase Warrant issued
March 4, 2009 from Parent in favor of Valens U.S. (as amended, restated,
modified and/or supplemented from time to time, the “Warrant,” and
collectively with the Secured Term Note, the Convertible Notes, the Revolving
Credit Note and the other Ancillary Agreements, the “Financing
Agreements”). Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Security Agreement.
Reference
is also hereby made to the fact that certain Events of Default have occurred
through the date hereof as more particularly identified on Exhibit A attached
hereto (each a “Designated Default”
and collectively, the “Designated
Defaults”).
Companies
have requested that the Creditor Parties forbear for a period of time from
exercising their rights and remedies under the Financing Agreements and
applicable law arising from the occurrence of the Designated Defaults and to
amend certain of the Financing Agreements and Creditor Parties are willing to do
so on the terms and conditions set forth below.
In
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to
satisfaction of the conditions precedent set forth below, the parties hereto
hereby agree as follows:
1. Acknowledgment Regarding
Previous Amendments. The parties hereto (i) acknowledge that
the parties hereto (A) previously amended the Security Agreement pursuant to a
certain letter agreement dated March 4, 2009 (as amended, restated, modified
and/or supplemented from time to time, the “Existing Amendment”)
and (B) entered into an overadvance letter agreement with respect to the
Security Agreement dated February 23, 2009 (as amended, restated, modified
and/or supplemented from time to time, the “Overadvance Letter”)
and (ii) agree that all references to the Amended and Restated Security
Agreement dated as of March 31, 2008 by and among the parties hereto and the
defined terms “Agreement” and “Security Agreement” set forth in the Existing
Amendment, the Overadvance Letter, the Secured Term Note, the Warrant and all
other instruments, documents and agreements executed in connection with the
Existing Amendment, the Overadvance Letter, the Secured Term Note and the
Warrant shall be deemed, for all purposes, to refer to the Security
Agreement.
2. Forbearance.
(a) Each
Company hereby acknowledges and agrees that the Designated Defaults have
occurred and are continuing, each of which entitles each Creditor Party to
exercise its rights and remedies under the Financing Agreements, applicable law
or otherwise. No Creditor Party has waived, presently intends to
waive and may ever waive such Designated Defaults and nothing contained herein
or the transactions contemplated hereby shall be deemed to constitute in any
manner whatsoever any such waiver; provided, however, that the Creditor Parties
temporarily waive, through the expiration of the Forbearance Period (as defined
below), any Events of Default arising solely from the Company’s failure to
timely deliver to Agent audited year end financial statements for its fiscal
year ended December 31, 2008 as a result of not having obtained an audit report
of its independent certified public accountants with respect thereto (“Audit Report”) and
the Company’s resulting failure to file with the SEC its Form 10-K for such
fiscal year solely on account of not having obtained the Audit
Report. Each Company hereby acknowledges and agrees that each
Creditor Party has the presently exercisable right to declare the Obligations to
be immediately due and payable under the terms of the Financing
Agreements.
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(b) In
reliance upon the representations, warranties and covenants of each Company
contained in this letter agreement (this “Agreement”), and
subject to the terms and conditions of this Agreement (including, without
limitation, the conditions to effectiveness set forth in Section 4 below) and
any agreements, documents or instruments executed in connection herewith, during
the Forbearance Period (as defined below), each Creditor Party will forbear from
exercising its rights and remedies under the Financing Agreements and applicable
law in respect of or arising out of any and all Designated
Defaults. Notwithstanding the foregoing, nothing contained herein
shall impair in any manner whatsoever any Creditor Party’s right to administer
the credit facility and/or to collect, receive and/or apply proceeds of each
Company’s accounts receivable and/or any other Collateral to the Obligations (as
defined in each Financing Agreement in which such term is defined), in each
case, in accordance with the terms of the Financing Agreements. For
purposes of this Agreement, the term “Forbearance Period”
shall mean the period commencing on the first date upon which all of the
conditions to the effectiveness of this Agreement set forth in Section 4 below
shall have been satisfied to the satisfaction of the Creditor Parties and ending
on the earlier to occur of (i) June 3, 2009 and (ii) the occurrence of any
Forbearance Default (as defined below).
(c) Upon the
termination of the Forbearance Period, the agreement of Creditor Parties to
forbear with respect to such Designated Defaults existing or continuing as of
such termination shall automatically and without further action terminate and be
of no further force and effect, it being expressly agreed that the effect of
such termination will be to permit each Creditor Party to exercise such rights
and remedies immediately, including, but not limited to, the acceleration of all
indebtedness and obligations of the Companies to the Creditor Parties, or any
one or more of them, in any case without any further notice, passage of time or
forbearance of any kind. It is further understood that if either of
the Companies shall apply for, consent to or suffer to exist the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of creditors, (iii) commence a voluntary case under
the federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated
a bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) suffer the filing of any
petition against it in any involuntary case under such bankruptcy laws, or (vii)
take any action for the purpose of effecting any of the foregoing, the
Obligations shall become automatically due and payable without declaration,
notice or demand by any of the Creditor Parties.
(d) The
occurrence of any one or more of the following events during the Forbearance
Period shall constitute a “Forbearance
Default”: (i) the existence of any Event of Default other than
a Designated Default; (ii) any representation or warranty of either Company
under this Agreement, any other New Agreement (as defined below) or any
Financing Agreement shall be false, misleading or incorrect in any material
respect; (iii) either Company’s failure to comply with the covenants, conditions
and agreements contained in this Agreement, any other New Agreement (as defined
below) or any Financing Agreement; or (iv) any person or entity, other than
Creditor Parties, shall at any time exercise for any reason any of its rights or
remedies, against either Company or either Company’s properties or assets (other
than the commencement of a lawsuit against either Company which is not deemed
material by the Creditor Parties in the exercise of their reasonable
discretion).
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3. Amendments to Financing
Agreements.
(a) Section 3
of the Security Agreement is hereby amended in its entirety to provide as
follows:
“3. Repayment of the
Loans. The Companies (a) may prepay the Obligations from time
to time in accordance with the terms and provisions of the Notes (and Section 18
hereof if such prepayment is due to a termination of this Agreement); (b) shall
repay on the expiration of the Term Loan Term (i) the then aggregate outstanding
principal balance of the A&R Closing Date Term Loan together with accrued
and unpaid interest, fees and charges; and (ii) all other amounts owed the
Lenders under the Secured Convertible Term Notes; (c) shall repay on the
expiration of the Revolver Term (i) the then aggregate outstanding principal
balance of the Revolving Loans together with accrued and unpaid interest, fees
and charges; and (ii) all other Obligations in respect of the Revolving Loans
owed the Creditor Parties under this Agreement and the Ancillary Agreements; (d)
subject to Section 2(a)(ii), shall repay on any day on which the then aggregate
outstanding principal balance of the Revolving Loans is in excess of the Formula
Amount at such time, the Revolving Loans in an amount equal to such excess; and
(e) shall repay on the expiration of the Second Term Loan Term (i) the then
aggregate outstanding principal balance of the Second Term Loan together with
accrued and unpaid interest, fees and charges; and (ii) all other amounts owed
to Valens U.S. under the Secured Term Note. Any payments of
principal, interest, fees or any other amounts payable hereunder or under any
Ancillary Agreement shall be made prior to 12:00 noon (New York time) on the due
date thereof in immediately available funds. For the avoidance of
doubt, the parties agree that the Companies may prepay the Obligations under the
Secured Term Note without prepaying the other Obligations, notwithstanding any
terms or provisions in the Notes to the contrary.”
(b) The
following definitions in Annex A to the
Security Agreement are hereby amended in their entirety to provide as
follows:
“Second Term Loan Maturity
Date” means June 3, 2009.
(c) the
following definitions are hereby added to Annex A to the
Security Agreement in their appropriate alphabetical order:
“Original Closing
Date” means August 17, 2007.
(d) The
reference to “April 3, 2009” set forth in the last line of the first paragraph
of the Secured Term Note is deleted and replaced with June 3, 2009.
(e) The last
sentence of Section 1.1 of the Secured Term Note is deleted and replaced in its
entirety with the following:
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“Interest
shall be (i) calculated on the basis of a 360 day year and (ii) payable monthly
in arrears, commencing on May 1, 2009, and on the first Business Day of each
consecutive calendar month thereafter through and including the Maturity Date,
whether by acceleration or otherwise.”
(f) Notwithstanding
anything to the contrary set forth in the Convertible Notes and provided no
Forbearance Default shall have occurred, with respect to the Companies’
Obligations under the Convertible Notes, for the months of April and May 2009,
the Companies shall only be required to make interest payments thereunder with
such interest payable in accordance with the terms of the Convertible
Notes. For purposes of clarity, provided no Forbearance Default shall
have occurred, there shall be no payments of principal due on April 1, 2009 and
May 1, 2009 under the Convertible Notes (the “Deferred Principal
Payments”); such Deferred Principal Payments being due and payable on the
Maturity Date (as defined in the Convertible Notes). In the event a
Forbearance Default occurs, the Deferred Principal Payments shall be
automatically due and payable in accordance with the Convertible Notes without
giving effect to this paragraph.
(g) Notwithstanding
anything to the contrary set forth in the Security Agreement or in any of the
Ancillary Agreements, and subject to all of the terms and conditions applicable
to Lenders making Revolving Loans to the Companies as set forth in the Security
Agreement and the Ancillary Agreements, during the Forbearance Period, the
Lenders shall only make Revolving Loans to the Companies in their sole
discretion and in accordance with the budget prepared by the Companies and
attached hereto as Exhibit A (the “Budget”). In
addition to the other requirements of Section 4 of the Security Agreement, each
request for a Revolving Loan (each a “Revolving Loan
Request”) shall specify the items to be paid with the proceeds of the
requested Revolving Loan and shall be accompanied by such other information
requested by Agent with respect to such items. All Revolving Loans
shall be used solely for the purpose of paying for the items specified in the
associated Revolving Loan Request.
(h) The
definition of “Specified Number” set forth in clause (h) of the definition
section of the Warrant is hereby amended in its entirety to provide as
follows:
“(h) The term
Specified Number means, on any date on which the Company receives an Exercise
Notice from the Holder, a number of shares of Common Stock computed using the
following formula:
(A/(1-A)
x (B-C))-C
where (i)
“A” equals 0.20 (subject to adjustment in accordance with the following
sentence), (ii) “B” equals the number of shares of Common Stock outstanding on a
Partially Diluted Basis on the date of exercise, and (iii) “C” equals the number
of shares of Common Stock previously issued to the Holder in connection with
partial exercises of this Warrant. In the event the outstanding
principal balance under the Secured Term Note, together with all accrued and
unpaid interest thereon and all fees and expenses owing to the Holder in
connection therewith, have not been repaid in full on or prior to June 3, 2009,
“A” shall equal 0.80. As used in this Warrant, the term “Partially
Diluted Basis” means the sum of (i) all shares of Common Stock outstanding as of
the date hereof plus (ii) all shares of Common Stock (“Underlying Shares”)
issuable on conversion or exercise of securities outstanding as of the date
hereof which are convertible into or exercisable for Common Stock, including
pursuant to this Warrant, having a conversion or exercise price equal to or less
than one hundred and fifteen percent (115%) of the Fair Market Value (as defined
in Section 1.2 hereof) plus (iii) all shares
of Common Stock and all Underlying Shares issued by the Company in connection
with the first $2,000,000 in gross proceeds from equity financings consummated
subsequent to the date hereof. As of the date of this Warrant, this
Warrant is exercisable for 12,827,296 shares of Common Stock (the “Warrant
Shares”). Notwithstanding adjustments to the Specified Number from
time to time, once shares of Common Stock are issued upon exercise hereunder to
the Holder of this Warrant, the Company shall have no claim, and hereby waives,
any potential claim to return of such shares of issued Common
Stock.”
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(i) The
Companies shall repay the outstanding principal balance of the Overadvance (as
defined in the Overadvance Letter) by no later than June 3, 2009 or earlier upon
the occurrence of a Forbearance Default, provided, however, that notwithstanding
the foregoing, the Companies shall continue to be obligated to prepay the
Overadvances in accordance with the terms of the Overadvance
Letter.
4. Conditions to
Effectiveness.
This
Agreement shall become effective upon satisfaction of the following conditions
precedent: (i) Agent shall have received a fully executed
original of this Agreement, (ii) Agent shall have received evidence of the
purchase (the “Xxxxxx
Equity Purchase”) by Xxxxxx Capital Master Fund, Ltd. (“Xxxxxx”) from Parent
of equity interests in Parent for an aggregate cash purchase price of not less
than $250,000 on terms, and pursuant to written agreements, satisfactory to
Creditor Parties, and the net cash proceeds therefrom shall have been remitted
to Agent for application to the Overadvance in accordance with the Overadvance
Letter, (iii) Companies shall have reimbursed the Creditor Parties for the full
amount of all of the Creditor Parties’ attorneys’ fees and costs incurred in
connection with the preparation and negotiation of this Agreement and each of
the instruments, documents and agreements contemplated hereby (collectively with
this Agreement, the “New Agreements”) and
in connection with the closing of the transactions described herein and therein,
and (iv) Agent shall have received all such other certificates,
instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory
to Agent and its counsel.
5. Representations, Warranties,
Reaffirmations and Covenants. To induce Creditor Parties to,
among other things, agree to the forbearance terms and the amendments set forth
above, each Company:
(a) represents
and warrants that (i) except as disclosed in the Company’s Exchange Act Filing
and other than certain unvested employee stock options and the equity interests
acquired by Xxxxxx in connection with the Xxxxxx Equity Purchase, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal), proxy or stockholder agreements, or arrangements
or agreements of any kind for the purchase or acquisition from the Parent of any
of its securities, (ii) all issued and outstanding shares of the Parent’s common
stock have been duly authorized and validly issued and are fully paid and
nonassessable, (iii) the rights, preferences, privileges and restrictions of the
shares of the Parent’s common stock are as stated in the Parent’s Certificate of
Incorporation as amended through the date hereof, and (iv) all issued and
outstanding shares of the Parent’s capital stock has been and shall be issued in
compliance with all applicable state and federal laws concerning the issuance of
securities;
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(b) acknowledges,
ratifies and confirms that all of the terms, conditions, representations and
covenants contained in the Financing Agreements to which it is a party are in
full force and effect and shall remain in full force subject to the terms of
this Agreement and effect after giving effect to the execution and effectiveness
of the New Agreements;
(c) acknowledges,
ratifies and confirms that the defined term “Obligations” under the Security
Agreement include, without limitation, all obligations and liabilities of the
Company under the New Agreements;
(d) acknowledges
and confirms that (i) the occurrence of a breach and/or an Event of Default
under any of the New Agreements shall constitute a breach and/or an Event of
Default under each of the Financing Agreements, (ii) the occurrence of a breach
and/or an Event of Default under any of the Financing Agreements shall
constitute a breach and/or an Event of Default under the New Agreements and
(iii) the New Agreements shall constitute Ancillary Agreements;
(e) represents
and warrants that no offsets, counterclaims or defenses exist as of the date
hereof with respect to the undersigned’s obligations under the Financing
Agreements to which they are a party;
(f) acknowledges,
ratifies and confirms that the Collateral secures all obligations and
liabilities of each Company to the Creditor Parties under each Financing
Agreement and each New Agreement (including interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, whether or not a claim for post-filing or
post-petition interest is allowed or allowable in such proceeding), whether now
existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent;
(g) represents
and warrants that (i) all of the representations made by or on behalf of such
Company in the Financing Agreements to which it is a party are true and correct
in all material respects on and as of the date hereof; (ii) it has the corporate
or limited liability company, as applicable, power and authority to execute and
deliver the New Agreements to which it is a party; (iii) all corporate or
limited liability company, as applicable, action on the part of each Company
(including their respective officers and directors) necessary for the
authorization of the New Agreements and the performance of all obligations of
the undersigned hereunder and thereunder has been taken; and (iv) the New
Agreements, when executed and delivered and, to the extent it is a party
thereto, will be valid and binding obligations of the undersigned;
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(h) releases,
remises, acquits and forever discharges each Creditor Party and its respective
employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the “Released Parties”),
from any and all actions and causes of action, judgments, executions, suits,
debts, claims, demands, liabilities, obligations, damages and expenses of any
and every character, known or unknown, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, for or because of any matter or things
done, omitted or suffered to be done by any of the Released Parties prior to and
including the date of execution hereof, and in any way directly or indirectly
arising out of or in any way connected to this Agreement, the Financing
Agreements, the New Agreements and any other document, instrument or agreement
made by the undersigned in favor of a Creditor Party; and
(i) covenants
and agrees that if the outstanding principal balance under the Secured Term
Note, all accrued interest thereon and all other fees, expenses and charges
owing from the Companies related thereto are not paid in full to Valens U.S. on
or prior to June 3, 2009, Parent shall, for the purpose of ensuring that it has
a sufficient number of authorized shares of common stock to enable the exercise
in full of the Warrant, file an amendment to its certificate of incorporation
with the State of Delaware no later than June 6, 2009, effectuating the
previously authorized reverse split of its common stock.
6. Miscellaneous.
(a) Nothing
contained herein shall (a) limit in any manner whatsoever either Company’s and
each other Person’s obligation to comply with, and the Creditor Parties’ right
to insist on the Companies’ and such other Person’s compliance with, each and
every term of the Financing Agreements, or (b) constitute a waiver of any Event
of Default or any right or remedy available to any Creditor Party, or of the
Companies’ or any other Person’s obligation to pay and perform all of its
obligations, in each case whether arising under the Financing Agreements,
applicable law and/or in equity, all of which rights and remedies howsoever
arising are hereby expressly reserved, are not waived and may, subject to the
terms of Section 2 hereof, be exercised by any Creditor Party at any time;
provided, however, that the Creditor Parties do temporarily waive any Events of
Default arising solely from the Company’s failure to timely deliver to Agent
audited year end financial statements for its fiscal year ended December 31,
2008 as a result of not having obtained the Audit Report and the Company’s
resulting failure to file with the SEC its Form 10-K for such fiscal year solely
on account of not having obtained the Audit Report.
(b) Parent
acknowledges that it has an affirmative obligation to make prompt public
disclosure of material agreements and material amendments to the Financing
Agreements. Parent intends to file a Form 8-K with respect to the
transactions contemplated by this Agreement no later than four (4) Business Days
following the date hereof, a copy of which shall be delivered to the Creditor
Parties.
(c) Except as
specifically amended herein, the Financing Agreements shall remain in full force
and effect, and are hereby ratified and confirmed. The execution,
delivery and effectiveness of this Agreement shall not operate as a waiver of
any right, power or remedy
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of any
Creditor Party, nor constitute a waiver of any provision of any of the Financing
Agreements. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
[remainder
of page intentionally left blank; signature pages follow]
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(d) This
Agreement 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 agreement. Any signature delivered
by a party by facsimile transmission shall be deemed to be an original signature
hereto.
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Very
truly yours,
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LV
ADMINISTRATIVE SERVICES, INC.,
as
Agent
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By:
/s/ Xxxxx
Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Authorized
Signatory
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VALENS
U.S. SPV I, LLC
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By: Valens
Capital Management, LLC, its investment
manager
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By:
/s/ Xxxxx
Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Authorized Signatory
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VALENS
OFFSHORE SPV I, LTD.
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By:
Valens Capital Management, LLC, its investment
manager
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By:
/s/ Xxxxx
Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Authorized Signatory
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PSOURCE
STRUCTURED DEBT LIMITED
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By:
PSource Capital Limited, its investment
consultant
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By:
/s/ Soondra
Appavoo
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Name:
Soondra Appavoo
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Title:
Managing Director
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By:
/s/ Xxxxx
Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Authorized
Signatory
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CALLIOPE
CAPITAL CORPORATION
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By: Laurus
Capital Management, LLC, its investment
manager
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By:
/s/ Xxxxx
Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Authorized
Signatory
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CONSENTED
AND AGREED TO THIS 15TH DAY OF APRIL, 2009:
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By:
/s/ Xxxxxxxx X.
Xxxx
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Name:
Xxxxxxxx X. Xxxx
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Title:
Chief Executive Officer
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PROLINK
SOLUTIONS, LLC
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By:
/s/ Xxxxxxxx X.
Xxxx
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Name:
Xxxxxxxx X. Xxxx
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Title: Chief
Executive Officer
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ACKNOWLEGEMENT OF
SUBORDINATED LENDER
Pursuant
to the terms of the Subordination Agreement (the “Subordination Agreement”)
dated as of March 31, 2008 among Valens U.S., Valens Offshore, Calliope and the
undersigned, the undersigned agreed, among other things, that the Junior
Liabilities are expressly subordinate and junior in right of payment to all
Senior Liabilities. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Subordination Agreement.
In
connection with the Companies and the Senior Lender entering into a Forbearance
Agreement and Omnibus Amendment to Agreements dated as of the date hereof (the
“Amendment”), the undersigned hereby: (a) confirms that (i) all indebtedness of
the Companies to the Senior Lenders including, without limitation, indebtedness
incurred in connection with the Amendment and any additional indebtedness
incurred after the date hereof shall constitute Senior Liabilities and (ii) all
indebtedness of the Companies to the undersigned including, without limitation,
indebtedness incurred after the date hereof, shall constitute Junior Liabilities
and (b) ratifies and confirms that all of the terms and conditions,
representations and covenants contained in the Subordination Agreement,
including without limitation, the prohibition on the undersigned’s right to
receive payment on the Junior Liabilities unless such payment is made in
accordance with the terms of the Subordination Agreement, shall remain in full
force and effect after giving effect to the execution and effectiveness of the
Amendment.
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PSOURCE
STRUCTURED DEBT LIMITED
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By:
PSource Capital Limited, its investment
consultant
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By:
/s/ Soondra
Appavoo
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Name:
Soondra
Appavoo
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Title:
Managing
Director
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Exhibit
A
Designated
Defaults
Events of
Default have occurred under the Financing Agreements as a result of the
following events or circumstances:
1. The
outstanding principal amount of the Overadvance (as defined in the Overadvance
Letter) exceeds the Formula Amount by an amount greater than the Maximum
Overadvance Amount (as defined in the Overadvance Letter) which amount was not
repaid when due;
2. The
Overadvance (together with accrued interest and fees in respect thereof) was not
repaid in full on the Overadvance Maturity Date as required pursuant to the
Overadvance Letter; and
3. The
Obligations in respect of the Secured Term Note were not repaid in full when due
pursuant to the terms of the Secured Term Note.
Exhibit
B
Budget
