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EXHIBIT B
SECOND AMENDMENT TO
NOTE EXCHANGE AGREEMENT
THIS SECOND AMENDMENT, dated as of this 31st day of December, 1997 (the
"Amendment") to the NOTE EXCHANGE AGREEMENT, dated as of June 5, 1997 (the
"Agreement"), as amended by the First Amendment to Note Exchange Agreement,
dated as of November 14, 1997 (the "First Amendment"), is entered into as of
the 31st day of December, 1997 by and among XXXXXXX COMMUNICATIONS CORPORATION,
an Iowa corporation (the "Company"), XXXXXXX XXXXXX & COMPANY LEASING, INC.
("BFCL"), XXXXXXX XXXXXX & COMPANY ("BFC") AND X.X. XXXXXXX INVESTMENTS, L.P.
("TJB") (BFCL, BFC and TJB are collectively referred to as the "Investors").
RECITAL
The Company and the Investors mutually desire to terminate the Agreement
and the First Amendment and to provide that the Company return the Notes to the
Investors in exchange for the Shares issued by the Company to the Investors
pursuant to the Agreement.
BFCL is the holder of a $750,000 term note issued by the Company, dated
January 31, 1997 (the "BFCL Note") and each of BFC and TJB is the holder of a
$500,000 promissory note issued by the Company dated December 31, 1996 (the
"BFC Note" and the "TJB Note") (collectively the BFCL Note, the BFC Note and
the TJB Note are hereinafter referred to as the "Notes").
AGREEMENTS
In consideration of the recital and mutual covenants contained in this
Amendment, the parties agree:
I. On the date of this Amendment, (a) the Company shall issue
and deliver to each of BFCL, BFC and TJB a promissory note identical
in all material respects to such Investor's Note described in
Recital A of the Agreement, except that (i) the due date on the BFCL
Note will be amended from January 31, 2001 to June 30, 1998 and the
due date of the BFC and TJB Notes will remain the same; (ii) that
all interest which was accrued and unpaid as of the date of the
Agreement and all interest which has accrued and which remains
unpaid since the date of the Agreement will be included in the
Principal amount of each of the Notes so that as of the execution of
this Amendment, the Principal amount due BFCL under the BFCL Note is
$792,786.40 and the Principal amount due BFC and TJB under the BFC
and the TJB Note is $1,000,000.00; (iii) the first 90 days of the
BFCL Note will require payments of interest only in the amount of
$10,240.16, with the first payment due January 30, 1998 and payments
due thereafter on the last day of February and March and beginning
April 30, 1998 and on the same day of each month thereafter,
payments of principal and interest in the amount of $22,265.29 are
due for the number of months remaining under the BFCL Note; (iv)
quarterly payments of interest only are due under the BFC and TJB
Notes in the amount of $5,000.00, with the first installment of
interest due on March 31, 1998 and quarterly payments due on the
same day of each consecutive calendar quarter thereafter for the
remaining term of the BFCL and TJB Notes; and (b) BFCL, BFC and TJB
shall deliver to the Company for cancellation the stock certiicates
representing all Shares issued by the Company to the Investors
pursuant to the agreement; and (c) the
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Company shall pay BFC and TJB accrued interest from April 1, 1997
through December 31, 1997. The accrued interest on each note
is $15,000.00 for a total of $30,000.00 to be paid at the signing
of this agreement.
II The Company agrees, either on its own behalf or, in the event
that revenues are received by the Company from an outside third
party or parties, the Company will pay or direct the outside third
party or parties to deposit all revenue of the Xxxxxxx consolidated
group directly to Box No.
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the "Lockbox"). BFCL on behalf of itself and BFC and TJB will
direct the funds in the Lockbox to payment of the payment
amounts set out in paragraph 1(a) above and the revenue remaining
in the Lockbox will then be directed to the Company. In the event
there are insufficient funds in the Lockbox at the time payment is
due under the Notes, the Company will pay any additional amounts to
BFCL at 000 Xxxxxx Xxxxxx, XX, Xxxxx Xxxxxx, Xxxx 00000.
III A warrant for the purchase of the Company's Common Stock, for the
number of shares for each Investor, as set out on the chart
immediately below. Such warrants shall have an exercise price of
$1.12 per share and shall be exercisable for up to five years from
the date of execution of this Amendment. Such warrants will be
similar to and subject to reasonable terms and conditions
including, but not limited to, registration rights, observation
rights and/or information rights, which are the same as those rights
granted to directors of the Company. Such warrants will be issued
to the Investors by the Company as soon as possible following
execution of this Amendment and shall be subject to legal review and
approval by all parties thereto.
BFCL 10% of the BFCL principal 79,279
BFC 15% of the BFC principal 75,000
TJB 15% of the TJB principal 75,000
IV In the event the Company attracts an investor or is able to
acquire significant capital and if the BFCL's reasonable opinion,
the Company is performing satisfactorily in comparison to the
proposed 1998 Xxxxxxx Consolidated Budget, a copy of which is
attached hereto, BFCL agrees to negotiate with and cooperate with
the Company to renegotiate the BFCL Note and potentially provide
additional financing for the Company, the terms of which will be
negotiated at the time of the transaction.
V Effective immediately upon receipt of the deliveries set
forth in Section 1 above, the Agreement (as amended by the First
Amendment) shall be terminated and neither the Company nor any of
the Investors shall have any rights, obligations or liabilities
pursuant to the Agreement or the First Amendment.
XXXXXXX COMMUNICATIONS XXXXXXX XXXXXX & COMPANY
CORPORATIONS LEASING, INC.
By /s/ Xxxxxx Xxxxxxx By /s/ Xxxxxx X. Xxxxxxx
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Title Chief Executive Officer Title President
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XXXXXXX XXXXXX & COMPANY
By /s/ Xxxxxx X. Xxxxxxx
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Title President
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X. X. XXXXXXX INVESTMENT, L.P.
By /s/ Xxxxxx X. Xxxxxxx
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Title President
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