Exhibit 10.3
REAFFIRMATION AND RATIFICATION AGREEMENT
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November 30, 2005
Laurus Master Fund, Ltd.
c/o Laurus Capital Management, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the (a) Subsidiary Guaranty dated as of February 8, 2005
made by New Xxxxxxxx Telephone Corp., a New York corporation ("New Xxxxxxxx"),
Telecarrier Services, Inc., a Delaware corporation ("Telecarrier"), Vox
Communications Corp., a Delaware corporation ("Vox"), AVI Holding Corp., a Texas
corporation ("AVI"), Xxxxxxxxxxxxx.xxx Corp., a Delaware corporation ("Telco")
and Line One, Inc., a New York corporation ("Line One") in favor of Laurus
Master Fund, Ltd., a Cayman Islands company ("Laurus") (as amended, modified or
supplemented from time to time, the "Subsidiary Guaranty"), (b) Master Security
Agreement dated as of February 8, 2005 made by eLEC Communications Corp., a New
York corporation (the "Company"), New Xxxxxxxx, Telecarrier, Vox, AVI, Telco and
Line One in favor of Laurus (as amended, modified or supplemented from time to
time, the "Master Security Agreement") and (c) Stock Pledge Agreement dated as
of February 8, 2005 made by the Company, New Xxxxxxxx, Telecarrier, Vox, AVI,
Telco and Line One in favor of Laurus (as amended, modified or supplemented from
time to time, the "Stock Pledge Agreement") (the Subsidiary Guaranty, the Master
Security Agreement and the Stock Pledge Agreement, collectively, the "Existing
Security and Guaranty Agreements").
To induce Laurus to provide additional financial accommodations to the
Company evidenced by (i) that certain Secured Convertible Term Note, dated
November 30, 2005, made by the Company in favor of Laurus (as amended, modified
or supplemented from time to time, the "November 2005 Term Note"), (ii) the
Purchase Agreement referred to in the November 2005 Term Note (as amended,
modified or supplemented from time to time, the "November 2005 Purchase
Agreement"), (iii) the Related Agreements referred to in, and defined in, the
November 2005 Purchase Agreement (the agreements set forth in the preceding
clauses (i) through (iii), inclusive, collectively, the "November 2005
Agreements"), each of the Company, New Xxxxxxxx, Telecarrier, Vox, AVI, Telco
and Line One hereby:
(a) represents and warrants to Laurus that it has reviewed and approved
the terms and provisions of each of the November 2005 Agreements and the
documents, instruments and agreements entered into in connection therewith;
(b) acknowledges, ratifies and confirms that all indebtedness incurred by,
and all other obligations and liabilities of, each of the Company, New Xxxxxxxx,
Telecarrier, Vox, AVI, Telco and Line One under each of the November 2005
Agreements are (i) "Obligations" under, and as defined in the Subsidiary
Guaranty, (ii) "Obligations" under, and as defined in,
the Master Security Agreement and (iii) "Indebtedness" under, and as defined in,
the Stock Pledge Agreement;
(c) acknowledges, ratifies and confirms that each of the November 2005
Agreements are "Documents" under, and as defined in, each of the Subsidiary
Guaranty, the Master Security Agreement and the Stock Pledge Agreement;
(d) acknowledges, ratifies and confirms that all of the terms, conditions,
representations and covenants contained in the Existing Security and Guaranty
Agreements are in full force and effect and shall remain in full force and
effect after giving effect to the execution and effectiveness of each of the
November 2005 Agreements;
(e) represents and warrants that no offsets, counterclaims or defenses
exist as of the date hereof with respect to any of the undersigned's obligations
under any Existing Security and Guaranty Agreement; and
(f) acknowledges, ratifies and confirms the grant by each of the Company,
New Xxxxxxxx, Telecarrier, Vox, AVI, Telco and Line One to Laurus of a security
interest in the assets of (including the equity interests owned by) each of the
Company, New Xxxxxxxx, Telecarrier, Vox, AVI, Telco and Line One, respectively,
as more specifically set forth in the Existing Security and Guaranty Agreements.
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This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
ELEC COMMUNICATIONS CORP.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
NEW XXXXXXXX TELEPHONE CORP.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
TELECARRIER SERVICES, INC.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
VOX COMMUNICATIONS CORP.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer:
AVI HOLDING CORP.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
XXXXXXXXXXXXX.XXX CORP.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
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LINE ONE, INC.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
Acknowledged and Agreed to by:
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxxx Grin
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Name: Xxxxxx Grin
Title: Director
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