EXHIBIT 4.47
FIRST AMENDMENT AGREEMENT
This First Amendment Agreement ("First Amendment") is entered into and
effective as of April 26, 2002, by and between Telenetics Corporation, a
California corporation ("Company"), and Xxxxx & Xxxxxx, LLP, a California
limited liability partnership ("holder").
R E C I T A L S
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A. The Company is indebted to the holder under a 6% Convertible
Subordinated Secured Promissory Note due 2003 in the original principal amount
of $474,852.32 ("Note") that was made by the Company in favor of the holder
pursuant to the terms of an Agreement dated as of June 25, 2001 by and between
the Company and the holder ("Debt Agreement"). The Note was made to evidence
indebtedness that the Company owed to the holder as a result of services
provided by the holder to the Company and is secured pursuant to a Security
Agreement entered into as of June 25, 2001 by and between the Company and the
holder ("Security Agreement").
B. As of the date hereof, the Company owed to the holder certain
principal and accrued but unpaid interest under the Note ("Past Services
Balance") and additional amounts as a result of additional services rendered by
the holder to the Company ("Additional Services Balance").
C. The Company and the holder desire to amend the Note, the Security
Agreement and the Debt Agreement on the terms set forth in this First Amendment.
A G R E E M E N T
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In consideration of the foregoing recitals and the agreements contained
in this First Amendment, the parties agree as follows:
1. The principal sum of the Note as of the date of this First Amendment
hereby is amended to include the sum of the Past Services Balance and the
Additional Services Balance. Commencing on May 1, 2002 and continuing on the
first day of each month thereafter until this Note is paid in full (each a
"Future Addition Date"), any and all amounts of fees and costs that become due
from the Company to the holder in connection with the holder's provision of
services to the Company during the month preceding the Future Addition Date
shall be added to the principal sum of this Note unless the holder, in its sole,
absolute and unfettered discretion, elects not to make such addition to the
principal balance of this Note.
2. The interest rate of the Note hereby is decreased from 6% per annum
to 3% per annum (computed on the basis of a 360-day year of twelve 30-day
months) for interest accruing under the Note on or after the date of this First
Amendment; provided, however, that if an Event of Default has occurred and is
continuing, then the interest rate of the Note shall be equal to the lesser of
6% per annum or the highest amount permitted by law.
3. Paragraph 1 of the Note hereby is amended to read in its entirety as
follows:
1. PAYMENTS OF PRINCIPAL AND INTEREST. Principal and interest
shall be payable in 21 successive monthly payments commencing on May 1, 2002 and
continuing on the first day of each month thereafter, with the first 20 monthly
payments to be at least $30,000.00 each and the final payment to be in the
amount of the unpaid principal balance plus all accrued and unpaid interest and
any other amounts payable under this Note. Payments shall be applied first
against accrued interest and then against outstanding principal and any other
amounts payable under this Note. All payments of principal of and interest on
this Note shall be in such coin or currency of the United States of America as
at the time of payment shall be legal tender for payment of public and private
debts.
4. Paragraph 9(a) of the Note hereby is amended to read in its entirety
as follows:
(a) The Company will duly and punctually pay the principal of
and interest on this Note in accordance with the terms of this Note. In
addition, the Company shall use its best efforts to make prepayments of any and
all amounts due under this Note at the earliest practicable dates.
5. Paragraph 10(d) of the Note hereby is amended to read in its
entirety as follows:
(d) Whenever used in this Note, the words "Company" and
"holder" shall be deemed to include their respective successors and assigns. The
Company may not assign its obligations under this Note, by operation of law or
otherwise, without the prior written consent of the holder, which consent may be
withheld in the holder's absolute discretion. This Note and any rights related
hereto may not be assigned by the holder of this Note to any third party, and
this note is non-negotiable and may not be transferred by endorsement or
delivery.
6. The Security Agreement remains in full force and effect. The Company
acknowledges that the Security Agreement was intended to and does secure the
Note, as amended by this First Amendment.
7. The Debt Agreement hereby is modified to the extent necessary to
reflect the terms of this First Amendment. The Company and the holder
acknowledge and agree that the registration and indemnification obligations of
the Company contained in the Debt Agreement apply to all additional shares of
common stock that become issuable upon conversion of the Note, as the Note is
amended by this First Amendment and as the Note may be further amended from time
to time.
8. Each party affirms as of the date of this First Amendment the
representations and warranties that it made to the other party in Section 3 or
Section 4 of the Debt Agreement.
9. Except as expressly modified above, the provisions of the Note, the
Security Agreement and the Debt Agreement remain in full force and effect.
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10. THE COMPANY ACKNOWLEDGES THAT THE HOLDER IS THE COMPANY'S LEGAL
COUNSEL, AND THAT AS A RESULT THE HOLDER HAS A CONFLICT OF INTEREST INSOFAR AS
IT HAS PARTICIPATED IN THE NEGOTIATION AND PREPARATION OF THIS FIRST AMENDMENT
AND ANY OTHER RELATED AGREEMENTS. THE COMPANY IRREVOCABLY AND PERMANENTLY WAIVES
ANY SUCH CONFLICT OF INTEREST ON THE PART OF THE HOLDER, AND ACKNOWLEDGES THAT
IT HAS BEEN ADVISED TO OBTAIN SEPARATE LEGAL REPRESENTATION IN CONNECTION WITH
THIS FIRST AMENDMENT AND TRANSACTIONS RELATING THERETO.
IN WITNESS WHEREOF, the undersigned duly authorized representatives of
the holder and the Company have executed and delivered this First Amendment as
of April 26, 2002.
COMPANY: TELENETICS CORPORATION
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, Chief Financial Officer
HOLDER: XXXXX & XXXXXX, LLP
By: /s/ Xxxxx Xxxxxxx
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Xxxxx X. Xxxxxxx, Partner
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