EXHIBIT 10.38
-NOTE EXTENSION, MODIFICATION
AND
AMENDMENT AGREEMENT
This NOTE EXTENSION, MODIFICATION AND AMENDMENT AGREEMENT (this
"Agreement") is dated and effective as of May 31, 2001, and is being entered
among ▇▇▇▇▇.▇▇▇, Inc., a Florida corporation ("Qorus"), Aelix, Inc., a Delaware
corporation ("Aelix," and, collectively with Qorus, the "Borrowers," and,
individually, a "Borrower"), ▇▇▇▇▇▇▇▇ Interests, LLC, a Delaware limited
liability company ("▇▇▇▇▇▇▇▇ Interests"), Apex Investment Fund III, L.P., a
Delaware limited partnership ("Apex III"), Apex Strategic Partners, LLC, a
Delaware limited liability company ("Apex Partners"), ▇▇▇▇▇▇▇▇ Communications
Corporation, a Delaware corporation ("▇▇▇▇▇▇▇▇ Communications"), Customer Care &
Technology Holdings, Inc., a Delaware corporation ("CCT Holdings," and,
collectively with ▇▇▇▇▇▇▇▇ Interests, Apex III, Apex Partners and ▇▇▇▇▇▇▇▇
Communications, the "Lenders," and, individually, a "Lender"), and ▇▇▇▇▇▇▇▇
Interests, as agent for itself and the other Lenders (in such capacity, together
with its successors in such capacity, the "Agent").
R E C I T A L S:
- - - - - - - -
The Borrowers together borrowed an aggregate of $7,664,999.04 (the
"Loans") from the Lenders during 2000 and 2001 for the purpose of funding their
respective operations. The Loans are evidenced by the unsecured promissory
notes, as the same have been or may be amended, modified, renewed, extended, or
supplemented from time to time and all substitutions therefor (collectively, the
"Notes," and, individually, a "Note") of the Borrowers payable to the Lenders,
as described on Exhibit A hereto.
The Borrowers have requested the Lenders to extend the maturity date of
the Notes to December 31, 2001.
The Lenders have agreed to extend the maturity of the Notes as
requested only if, in consideration therefor, the Borrowers secure the repayment
of the Notes by granting to the Agent, on behalf of the Lenders, a first lien
security interest in and to substantially all the assets of the Borrowers upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties, intending to be legally bound, do
hereby agree as follows:
Article 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms have the
following meanings:
"Affiliate" means, as to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, such Person; (b)
that directly or indirectly beneficially owns or holds five percent or
more of any class of voting stock of such Person; or (c) five percent
or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Person in question. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall the Agent or any Lender
be deemed an Affiliate of the Borrower or any of its Subsidiaries.
"Business Day" means any day on which commercial banks are not
authorized or required to close in Chicago, Illinois.
"Collateral" has the meaning specified in the Security
Agreement, together with any other property and collateral which may
now or hereafter secure the Obligations or any part thereof.
"Default" means an Event of Default or the occurrence of an
event or condition which with notice or lapse of time or both would
become an Event of Default.
"Dollars" and "$" mean lawful money of the United States of
America.
"Event of Default" has the meaning specified in Section 6.1.
"Governmental Authority" means any nation or government, any
state or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or
title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement, the Security Agreement,
the Notes, and all other promissory notes, security agreements, deeds
of trust, assignments, guaranties, and other instruments, documents,
and agreements executed and delivered pursuant to or in connection with
this Agreement, as such instruments, documents, and agreements have
been or may be amended, modified, renewed, extended, or supplemented
from time to time.
"Maximum Rate" means, at any time and with respect to any
Lender, the maximum rate of interest under applicable law that such
Lender may charge the Borrowers. The Maximum Rate shall be calculated
in a manner that takes into account any and all fees, payments, and
other charges in respect of the Loan Documents that constitute interest
under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at the
time of such change in the Maximum Rate.
"Obligated Party" means Qorus, Aelix and any other Person who
is or becomes party to any agreement that guarantees or secures payment
and performance of the Obligations or any part thereof.
"Obligations" means all obligations, indebtedness, and
liabilities of any of the Borrowers to the Agent, the Lenders, and
their Affiliates, or any of them, arising pursuant to any of the Loan
Documents, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, including, without limitation, the
obligations, indebtedness, and liabilities of any of the Borrowers
under this Agreement, the Notes and the other Loan Documents, and all
attorneys' fees and other expenses incurred in the enforcement or
collection thereof.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Required Lenders" means Lenders holding at least 66-2/3% of
the outstanding aggregate principal amount of the Notes.
"Security Agreement" means, collectively, (a) that certain
Blanket Security Agreement among the Borrowers and the Agent of even
date herewith, as the same may be amended, restated or modified from
time to time and (b) any other security agreement of any Obligated
Party in favor of the Agent for the benefit of the Lenders, in form and
substance satisfactory to the Agent, as the same may be amended,
supplemented, or modified.
"Subsidiary" means any corporation of which at least a
majority of the outstanding shares of stock having by the terms thereof
ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether or not at the time stock of
any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by any Borrower or one
or more of the Subsidiaries or by any Borrower and one or more of the
Subsidiaries.
"UCC" means the Uniform Commercial Code as in effect in the
State of Illinois as the same has been or may be amended or revised
from time to time, or, if so required with respect to any particular
collateral by mandatory provisions of applicable law, as in effect in
the jurisdiction in which such Collateral is located.
Section 1.2 Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms
defined. The words "hereof," "herein," and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Unless otherwise specified, all
Article and Section references pertain to this Agreement. Terms used herein that
are defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.
Article 2
Extension of Maturity Dates and Amendment of Notes
Section 2.1 Extension of Maturity Date. Subject to Section 2.4 hereof, each
Lender severally agrees to extend the maturity date of each Note payable to such
Lender to December 31, 2001. Subject to Section 2.4 hereof, each Lender
severally agrees that each Note payable to such Lender is hereby modified and
amended to provide that each Note payable to such Lender is due and payable on
or before December 31, 2001.
Section 2.2 No Other Amendments. Each of the other terms and provisions of each
of the Notes shall remain in full force and effect.
Section 2.3 Exchange of Notes Not Required. Subject to Section 2.4 hereof, each
Lender severally agrees that the Borrowers may attach a copy of this Agreement
to the Notes to evidence the amendment of the Notes set forth in Section 2.1
hereof, and that it shall not be necessary otherwise to amend or reissue any
Note to give effect to such amendment.
Section 2.4 Consent of All Lenders Required. The extension of the maturity date
of the Notes and the amendment of the Notes for which provision is made in
Section 2.1 hereof shall not be effective for any Note unless each Lender
becomes a party hereto.
Article 3
Security
Section 3.1 Collateral. To secure full and complete payment and performance of
the Obligations, each Borrower shall grant to the Agent for the benefit of the
Lenders a perfected first priority lien and security interest in all the
Collateral pursuant to the Security Agreement. Each Borrower shall execute and
deliver the Security Agreement to the Agent. Each Borrower and each other
Obligated Party shall execute and cause to be executed such further documents
and instruments, including, without limitation, UCC financing statements, as the
Agent, in its sole discretion, deems necessary or desirable to evidence and
perfect its liens and security interests in the Collateral.
Section 3.2 Setoff. If an Event of Default shall have occurred and is
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to either of the Borrowers (any such notice being hereby
expressly waived by each of the Borrowers), to set off and apply any and all
deposits at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of either of the Borrowers against
any and all of the obligations of either of the Borrowers now or hereafter
existing under this Agreement, such Lender's Note or Notes, or any other Loan
Document, irrespective of whether or not the Agent or such Lender shall have
made any demand under this Agreement or such Lender's Note or Notes or such
other Loan Document and although such obligations may be unmatured. Each Lender
agrees promptly to notify the Borrowers (with a copy to the Agent) after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application. The rights and remedies
of each Lender hereunder are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have.
Article 4
Conditions Precedent
Section 4.1 Extension of Maturity Date and Amendment of Notes. The obligation of
each Lender to extend the maturity of the Notes and to amend the Notes as herein
provided is subject to the condition precedent that the Agent shall have
received all of the following, each dated (unless otherwise indicated) the date
hereof, in form and substance satisfactory to the Agent:
(a) Security Agreement. The Security Agreement executed by each Borrower,
along with the delivery of the capital stock of the Subsidiaries
pledged pursuant to the Security Agreement, together with undated stock
powers; and
(b) Financing Statements. UCC financing statements executed by each
Borrower covering the Collateral.
Section 4.2 Additional Documentation. The Agent shall have received such
additional approvals, opinions, or documents as the Agent or its legal counsel
may reasonably request.
Article 5
Representations and Warranties
To induce the Agent and the Lenders to enter into this Agreement, the
Borrowers jointly and severally represent and warrant to the Agent and the
Lenders that:
Section 5.1 Corporate Existence. Each Borrower and each Subsidiary (a) is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite corporate
power and authority to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a material adverse effect
on its business, condition (financial or otherwise), operations, prospects, or
properties. Each Borrower has the corporate power and authority to execute,
deliver, and perform its obligations under this Agreement, the Notes and the
other Loan Documents to which it is or may become a party.
Section 5.2 Corporate Action; No Breach. The execution, delivery, and
performance by each Borrower of this Agreement, the Notes and the other Loan
Documents to which such Person is or may become a party and compliance with the
terms and provisions hereof and thereof have been duly authorized by all
requisite corporate action on the part of such Person and do not and will not
(a) violate or conflict with, or result in a breach of, or require any consent
under (i) the articles of incorporation or bylaws of the Borrowers or any of the
Subsidiaries, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator, or (iii) any
agreement or instrument to which the either of the Borrowers or any of the
Subsidiaries is a party or by which any of them or any of their property is
bound or subject, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien (except as
provided in Article 3) upon any of the revenues or assets of the Borrowers or
any Subsidiary.
Section 5.3 Operation of Business. Each Borrower and each Subsidiary possesses
all licenses, permits, franchises, patents, copyrights, trademarks, and trade
names, or rights thereto, necessary to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted, and
each Borrower and each Subsidiary is not in violation of any valid rights of
others with respect to any of the foregoing.
Section 5.4 Enforceability. This Agreement, the Notes and the Security Agreement
constitute, and the other Loan Documents to which each Borrower is party, when
delivered, shall constitute, the legal, valid, and binding obligations of such
Person, enforceable against such Person in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors' rights.
Section 5.5 Approvals. No authorization, approval, or consent of, and no filing
or registration with, any Governmental Authority or third party is or will be
necessary for the execution, delivery, or performance by any Borrower of this
Agreement, the Notes, the Security Agreement and the other Loan Documents to
which such Borrower is or may become a party or for the validity or
enforceability thereof.
Section 5.6 Disclosure. No statement, information, report, representation, or
warranty made by the Borrowers in this Agreement, the Notes, the Security
Agreement or in any other Loan Document or furnished to the Agent or any Lender
in connection with this Agreement, the Notes, the Security Agreement or any
transaction contemplated hereby or thereby contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact known to any
Borrower which has a material adverse effect, or which might in the future have
a material adverse effect, on the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower or any Subsidiary that has
not been disclosed in writing to the Agent and the Lenders.
Section 5.7 Compliance with Laws. Neither any Borrower nor any Subsidiary is in
violation in any material respect of any law, rule, regulation, order, or decree
of any Governmental Authority or arbitrator.
Section 5.8 Collateral. Effective as of May 31, 2001, pursuant to the Loan
Documents described in Article 3, each Borrower has granted to the Agent a first
priority perfected security interest in substantially all of its personal
property assets.
Article 6
Default
Section 6.1 Events of Default. Each of the following shall be deemed an "Event
of Default":
(a) Any Borrower shall fail to pay when due any principal or interest owing
under the Notes; or shall fail to pay when due any other Obligations or
any part thereof and such failure continues for five (5) days.
(b) Any Borrower, any Subsidiary, or any Obligated Party shall commence a
voluntary proceeding seeking liquidation, reorganization, or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian, or other
similar official of it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for
the benefit of creditors or shall generally fail to pay its debts as
they become due or shall take any corporate action to authorize any of
the foregoing.
(c) An involuntary proceeding shall be commenced against any Borrower, any
Subsidiary, or any Obligated Party seeking liquidation, reorganization,
or other relief with respect to it or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or a substantial part of its property, and such
involuntary proceeding shall remain undismissed and unstayed for a
period of sixty (60) days.
(d) This Agreement or any other Loan Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any
Borrower, any Subsidiary, any Obligated Party or any of their
respective shareholders, or any Borrower or any Obligated Party shall
deny that it has any further liability or obligation under any of the
Loan Documents, or any Lien or security interest created by the Loan
Documents shall for any reason cease to be a valid, first priority
perfected security interest in and lien upon any of the Collateral
purported to be covered thereby.
(e) Any Borrower or any Subsidiary, or any of their respective properties,
revenues, or assets, shall become the subject of an order of
forfeiture, seizure, or divestiture, and the same shall not have been
discharged (or provisions shall not be made for such discharge) within
thirty (30) days from the date of entry thereof.
Section 6.2 Remedies. If any Event of Default shall occur and be continuing, the
Agent may, and if directed by the Required Lenders, shall, do any one or more of
the following:
(a) Acceleration. Declare all outstanding principal of and accrued and
unpaid interest on the Notes and all other obligations of the Borrowers
under the Loan Documents immediately due and payable, and the same
shall thereupon become immediately due and payable, without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by each Borrower.
(b) Judgment. Reduce any claim to judgment.
(c) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
Agent for the benefit of itself and the Lenders to secure payment and
performance of the Obligations in accordance with the terms of the Loan
Documents.
(d) Rights. Exercise any and all rights and remedies afforded by the laws
of the State of Illinois or any other jurisdiction, by any of the Loan
Documents, by equity, or otherwise.
Section 6.3 Performance by the Agent. If any Borrower shall fail to perform any
covenant or agreement in accordance with the terms of the Loan Documents, the
Agent may, at the direction of the Required Lenders, perform or attempt to
perform such covenant or agreement on behalf of such Borrower. In such event,
such Borrower shall, at the request of the Agent, promptly pay any amount
expended by the Agent in connection with such performance or attempted
performance to the Agent, together with interest thereon from and including the
date of such expenditure to but excluding the date such expenditure is paid in
full. Notwithstanding the foregoing, it is expressly agreed that neither the
Agent nor any Lender shall have any liability or responsibility for the
performance of any obligation of any Borrower under this Agreement or any of the
other Loan Documents.
Article 7
Relationship Among Lenders
Section 7.1 Appointment and Grant of Authority. Each Lender hereby appoints
▇▇▇▇▇▇▇▇ Interests as its Agent under and for the purposes of this Agreement,
the Notes, the Security Agreement and each other Loan Document. Each Lender
authorizes the Agent to act on behalf of such Lender under this Agreement, the
Notes and each other Loan Document, and, in the absence of other written
instructions from the Required Lenders received from time to time by the Agent
(with respect to which the Agent agrees that it will comply, except as otherwise
provided in this Article 7 or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto. Each Lender hereby authorizes, consents to, and
directs each Borrower to deal with the Agent as the true and lawful agent of
such Lender to the extent set forth herein. No implied covenants or additional
obligations shall be read into the Loan Documents as against the Agent. At any
time and from time to time the Agent may request such further written direction
from the Lenders as the Agent may require.
Section 7.2 Non-Reliance on Agent. Each Lender agrees that it has, independently
and without reliance on the Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Borrowers and decision to enter into this Agreement and become a
"Lender" hereunder, and that it will, independently and without reliance upon
the Agent, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Loan Documents. The Agent shall not be
required to keep informed as to the performance or observance by the Borrowers
of the Loan Documents or any other document referred to or provided for herein
or to inspect the properties or books of the Borrowers. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrowers (or any
of their related companies) which may come into the Agent's possession.
Section 7.3 Responsibility of the Agent and Other Matters.
(a) The Agent shall have no duties, responsibilities or liabilities except
those expressly set forth in the Loan Documents, and those duties,
responsibilities and liabilities shall be subject to the limitations
and qualifications set forth in this Article 7 or in an applicable Loan
Document. The duties of the Agent shall be mechanical and
administrative in nature.
(b) Neither the Agent nor any of its directors, officers or employees shall
be liable for any action taken or omitted (whether or not such action
taken or omitted is within or without the Agent's responsibilities and
duties expressly set forth in this Agreement) under or in connection
with the Loan Documents or any other instrument or document in
connection herewith, except for gross negligence or willful misconduct.
Without limiting the foregoing, neither the Agent nor any of its
directors, officers or employees shall be responsible for, or have any
duty to examine into (a) the genuineness, execution, validity,
effectiveness, enforceability, value or sufficiency of (i) the Loan
Documents, or (ii) any document or instrument furnished pursuant to or
in connection with the Loan Documents, (b) the creation, perfection or
priority of any of the Liens purported to be created by any of the Loan
Documents, or the genuineness, enforceability, existence, value or
sufficiency of any collateral security, (c) the collectibility of any
amounts owed by the Borrowers, (d) any recitals or statements or
representations or warranties in connection with the Loan Documents,
(e) any failure of any party to the Loan Documents to receive any
communication sent, or (f) the assets, liabilities, financial
condition, results of operations, business or creditworthiness of the
Borrowers. Any such inquiry which may be made by the Agent shall not
obligate it to make any further inquiry or to take any action.
(c) The Agent shall be entitled to act, and shall be fully protected in
acting upon, any communication in whatever form believed by the Agent
in good faith to be genuine and correct and to have been signed or sent
or made by a proper person or persons or entity. The Agent may consult
counsel and shall be entitled to act, and shall be fully protected in
any action taken in good faith, in accordance with advice given by
counsel. The Agent may employ agents and attorneys-in-fact and shall
not be liable for the default or misconduct of any such agents or
attorneys-in-fact selected by the Agent with reasonable care. The Agent
shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, provisions or conditions of the Loan
Documents on any Borrower's part. Any such inquiry which may be made by
the Agent shall not obligate it to make any further inquiry or to take
any action.
Section 7.4 Action on Instructions. The Agent shall be entitled to act or
refrain from acting, and in all cases shall be fully protected in acting or
refraining from acting, under the Loan Documents or any other instrument or
document in connection herewith or therewith in accordance with instructions in
writing from the Lenders or the Required Lenders, as applicable.
Section 7.5 Indemnification. To the extent any Borrower does not reimburse and
save the Agent harmless according to the terms hereof for and from all costs,
expenses and disbursements in connection herewith, such costs, expenses and
disbursements shall be borne by the Lenders ratably in accordance with the
amount of their respective loans to the Borrowers, and the Lenders hereby agree
on such basis (i) to reimburse the Agent for all such costs, expenses and
disbursements on request and (ii) to indemnify and save harmless the Agent
against and from any and all losses, obligations, penalties, actions, judgments
and suits and other costs, expenses and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
other than as a consequence of gross negligence or willful misconduct on the
part of the Agent, arising out of or in connection with the Loan Documents or
any instrument or document in connection herewith or therewith, or any request
of the Lenders, including, without limitation the costs, expenses and
disbursements in connection with defending itself against any claim or
liability, or answering any subpoena, related to the exercise or performance of
any of its powers or duties under the Loan Documents or the taking of any action
under or in connection with the Loan Documents. The Agent shall not be required
to take any action hereunder, under the Notes, or under any other Loan Document,
or to prosecute or defend any suit in respect of this Agreement, the Notes, or
any other Loan Document, unless it is indemnified hereunder to its satisfaction.
If any indemnity in favor of the Agent shall be or become, in the Agent's
determination, inadequate, the Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
Section 7.6 ▇▇▇▇▇▇▇▇ Interests and Affiliates. With respect to the Loans made by
▇▇▇▇▇▇▇▇ Interests under its Notes, ▇▇▇▇▇▇▇▇ Interests shall have the same
rights and powers under the Loan Documents applicable to it in its individual
capacity as any other Lender and may exercise the same as though it were not the
Agent. ▇▇▇▇▇▇▇▇ Interests and its Affiliates may lend money to, and generally
engage, and continue to engage, in any kind of business with the Borrowers as if
▇▇▇▇▇▇▇▇ Interests were not the Agent.
Section 7.7 Notice to Holder of Notes. The Agent may deem and treat the payees
of the Notes as the owners thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof has been filed with the Agent. Any
request, authority or consent of any holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note.
Section 7.8 Successor Agent. The Agent may resign as such at any time upon at
least 30 days' prior notice to the Borrowers and all Lenders. If the Agent at
any time shall resign, the Required Lenders may appoint another Lender as a
successor Agent, which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
notice of resignation, then the retiring Agent may, but shall not be obligated
to, on behalf of the Lenders, appoint a successor Agent, which shall be one of
the Lenders. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as the Agent, the
provisions of this Article 7 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement; and
Section 8.1 and Section 8.2 shall continue to inure to its benefit.
Article 8
Miscellaneous
Section 8.1 Expenses. Each Borrower hereby agrees to pay on demand: (a) all
costs and expenses of the Agent and the Lenders in connection with the
preparation, negotiation, execution, and delivery of this Agreement, the Notes,
the Security Agreement and the other Loan Documents and any and all amendments,
modifications, renewals, extensions, and supplements thereof and thereto,
including, without limitation, the fees and expenses of legal counsel for the
Agent and the Lenders, (b) all costs and expenses of the Agent and the Lenders
in connection with any restructuring or workout of the Obligations, whether or
not consummated and whether or not in connection with any voluntary or
involuntary bankruptcy or insolvency proceedings, any Default and the
enforcement of this Agreement, the Notes, the Security Agreement or any other
Loan Document, including, without limitation, the fees and expenses of legal
counsel for the Agent and legal counsel for the Lenders, (c) all transfer,
stamp, documentary, or other similar taxes, assessments, or charges levied by
any Governmental Authority in respect of this Agreement, the Notes, the Security
Agreement or any of the other Loan Documents, (d) all costs, expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or Lien
contemplated by this Agreement, the Notes, the Security Agreement or any other
Loan Document, and (e) all other costs and expenses incurred by the Agent in
connection with this Agreement, the Notes, the Security Agreement or any other
Loan Document.
Section 8.2 Indemnification. The Borrowers hereby jointly and severally agree to
indemnify the Agent and each Lender and each Affiliate thereof and their
respective officers, directors, employees, attorneys, and agents from, and hold
each of them harmless against, any and all losses, liabilities, claims, damages,
penalties, judgments, disbursements, costs, and expenses (including attorneys'
fees) to which any of them may become subject which directly or indirectly arise
from or relate to (a) the negotiation, execution, delivery, performance,
administration, or enforcement of any of the Loan Documents, except to the
extent that such losses, liabilities, claims, damages, penalties, judgments,
disbursements, costs and expenses are determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the willful
misconduct of the party seeking indemnification, (b) any of the transactions
contemplated by the Loan Documents, (c) any breach by any of the Borrowers of
any representation, warranty, covenant, or other agreement contained in any of
the Loan Documents, or (d) any investigation, litigation, or other proceeding,
including, without limitation, any threatened investigation, litigation, or
other proceeding relating to any of the foregoing (all the foregoing,
collectively, the "Indemnified Liabilities"). Without limiting any provision of
this Agreement, the Notes, the Security Agreement or any of the other Loan
Document, it is the express intention of the parties hereto that each Person to
be indemnified under this Section 8.2 shall be indemnified from and held
harmless against any and all losses, liabilities, claims, damages, penalties,
judgments, disbursements, costs, and expenses (including attorneys' fees)
arising out of or resulting from the sole or contributory negligence of such
Person. The agreements of the Borrowers in this Section 8.2 shall survive
termination of this Agreement.
Section 8.3 Limitation of Liability. None of the Agent, any Lender, or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and each Borrower hereby waives, releases, and
agrees not to ▇▇▇ any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by such Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. Each Borrower hereby waives,
releases, and agrees not to ▇▇▇ the Agent or any Lender or any of their
respective Affiliates, officers, directors, employees, attorneys, or agents for
punitive damages in respect of any claim in connection with, arising out of, or
in any way related to, this Agreement, the Notes, the Security Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement, the Notes, the Security Agreement or any of the other Loan Documents.
Section 8.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Agent and the Lenders shall
have the right to act exclusively in the interest of the Agent and the Lenders
and shall have no duty of disclosure, duty of loyalty, duty of care, or other
duty or obligation of any type or nature whatsoever to any Borrower or to any
Borrower's shareholders or any other Person.
Section 8.5 No Fiduciary Relationship. The relationship between each Borrower
and each Lender is solely that of debtor and creditor, and neither the Agent nor
any Lender has any fiduciary or other special relationship with any Borrower,
and no term or condition of any of the Loan Documents shall be construed so as
to deem the relationship between any Borrower and any Lender to be other than
that of debtor and creditor.
Section 8.6 Equitable Relief. Each Borrower recognizes that in the event such
Borrower fails to pay, perform, observe, or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the Agent
and the Lenders. Each Borrower therefore agrees that the Agent and the Lenders,
if the Agent or the Lenders so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
Section 8.7 No Waiver; Cumulative Remedies. No failure on the part of the Agent
or any Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement, the Notes, the Security
Agreement and the other Loan Documents are cumulative and not exclusive of any
rights and remedies provided by law.
Section 8.8 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. No Borrower may assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Agent and all of
the Lenders. Each Borrower and each Lender agree that any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement (including under its Note or Notes) to secure obligations of such
Lender; provided, however, that no such pledge or assignment shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
Section 8.9 Survival. All representations and warranties made in this Agreement
or any other Loan Document or in any document, statement, or certificate
furnished in connection with this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and no investigation by
the Agent or any Lender or any closing shall affect the representations and
warranties or the right of the Agent or any Lender to rely upon them. Without
prejudice to the survival of any other obligation of any Borrower hereunder, the
obligations of each Borrower under Section 8.1 and Section 8.2 shall survive
repayment of the Notes.
Section 8.10 Entire Agreement. This Agreement, the Notes, and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. There are no oral agreements among the parties hereto.
Section 8.11 Amendments, Etc. No amendment, modification or waiver of, or
consent with respect to, any provision of the Loan Documents shall in any event
be effective unless the same shall be in writing and signed and delivered by the
Agent and the Required Lenders; provided, however, that no amendment,
modification or waiver which (a) extends the maturity of any Note or any
installment thereof, (b) decreases the time or the amount of any interest or fee
payable thereunder, (c) changes the rate of interest payable, (d) releases any
Collateral from the Lien in favor of the Agent, or (e) changes this Section
8.11, shall be effective unless signed by the Agent and all Lenders. Any waiver
of any provision of this Agreement, any Note or any of the other Loan Documents,
and any consent to any departure by any Borrower from the terms of any provision
of the Loan Documents, shall be effective only in the specific instance and for
the specific purpose for which given.
Section 8.12 Maximum Interest Rate. No provision of this Agreement, the Notes or
of any other Loan Document shall require the payment or the collection of
interest in excess of the maximum amount permitted by applicable law. If any
excess of interest in such respect is hereby provided for, or shall be
adjudicated to be so provided, in any Loan Document or otherwise in connection
with this loan transaction, the provisions of this Section shall govern and
prevail and neither the Borrower nor the sureties, guarantors, successors, or
assigns of the Borrower shall be obligated to pay the excess amount of such
interest or any other excess sum paid for the use, forbearance, or detention of
sums loaned pursuant hereto. In the event any Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by such Lender's Notes;
and, if the principal of such Lender's Notes has been paid in full, any
remaining excess shall forthwith be paid to the applicable Borrower. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, each Borrower and each Lender shall, to the extent permitted by applicable
law, (a) characterize any non-principal payment as an expense, fee, or premium
rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the entire contemplated term of
the indebtedness evidenced by the Notes so that interest for the entire term
does not exceed the Maximum Rate.
Section 8.13 Notices. All notices and other communications provided for in this
Agreement and the other Loan Documents to which any Borrower is a party shall be
given or made by telex, telegraph, telecopy, cable, or in writing and telexed,
telecopied, telegraphed, cabled, mailed by certified mail, return receipt
requested, or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to any party at
such other address as shall be designated by such party in a notice to each
other party given in accordance with this Section 8.13. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telex or telecopy, subject to telephone
confirmation of receipt, or delivered to the telegraph or cable office, subject
to telephone confirmation of receipt, or when personally delivered or, in the
case of a mailed notice, three (3) days after being duly deposited in the mails,
in each case given or addressed as aforesaid.
Section 8.14 Governing Law; Venue; Service of Process. This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois
and the applicable laws of the United States of America. This Agreement has been
entered into in ▇▇▇▇ County, Illinois, and it shall be performable for all
purposes in ▇▇▇▇ County, Illinois. Any action or proceeding against any Borrower
under or in connection with any of the Loan Documents may be brought in any
state or federal court in ▇▇▇▇ County, Illinois. Each Borrower hereby
irrevocably (a) submits to the nonexclusive jurisdiction of such courts, and (b)
waives any objection it may now or hereafter have as to the venue of any such
action or proceeding brought in any such court or that any such court is an
inconvenient forum. Each Borrower agrees that service of process upon it may be
made by certified or registered mail, return receipt requested, at its corporate
headquarters. Nothing herein or in any of the other Loan Documents shall affect
the right of the Agent or any Lender to serve process in any other manner
permitted by law or shall limit the right of the Agent or any Lender to bring
any action or proceeding against any Borrower or with respect to any of its
property in courts in other jurisdictions. Any action or proceeding by any
Borrower against the Agent or any Lender shall be brought only in a court
located in ▇▇▇▇ County, Illinois.
Section 8.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Telecopies of signatures
shall be binding and effective as originals.
Section 8.16 Severability. Any provision of this Agreement held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 8.17 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
Section 8.18 Construction. Each Borrower, the Agent, and each Lender
acknowledges that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Section 8.19 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or such condition exists.
Section 8.20 Waiver of Jury Trial. To the fullest extent permitted by applicable
law, each of the parties hereto hereby irrevocably and expressly waives all
right to a trial by jury in any action, proceeding, or counterclaim (whether
based upon contract, tort, or otherwise) arising out of or relating to any of
the Loan Documents or the transactions contemplated thereby or the actions of
the Agent or any Lender in the negotiation, administration, or enforcement
thereof.
Section 8.21 Amendment. This Agreement amends the Notes. The execution of this
Agreement and the other Loan Documents executed in connection herewith does not
extinguish the indebtedness outstanding in connection with the Notes, nor does
it constitute a novation with respect to such indebtedness.
Article 9
Release
Section 9.1 Release. Each Borrower represents and warrants that as of the date
hereof there are no claims or offsets against or defenses or counterclaims to
its or any Obligated Parties' obligations under any Note or any of the other
Loan Documents. To induce the Agent and the Lenders to enter into this
Agreement, each Borrower hereby unconditionally and irrevocably remises,
acquits, and fully and forever releases and discharges the Agent and each Lender
and all respective Affiliates and subsidiaries of the Agent and the Lenders,
their respective officers, servants, employees, agents, attorneys, principals,
directors and shareholders, and their respective heirs, legal representatives,
successors and assigns (collectively, the "Released Lenders Parties") from any
and all claims, demands, causes of action, obligations, remedies, suits, damages
and liabilities (collectively, the "Borrower Claims") of any nature whatsoever,
whether now known, suspected or claimed, whether arising under common law, in
equity or under statute, which such Borrower ever had or now has against the
Released Lenders Parties which may have arisen at any time on or prior to the
date of this Agreement and which were in any manner related to any of the Notes
or any of the other Loan Documents or the enforcement or attempted enforcement
by the Agent or the Lenders of rights, remedies or recourses related thereto.
Each Borrower covenants and agrees never to commence, voluntarily aid in any
way, prosecute or cause to be commenced or prosecuted against any of the
Released Lenders Parties any action or other proceeding based upon any of the
Borrower Claims which may have arisen at any time on or prior to the date of
this Agreement and were in any manner related to any Note or to any of the other
Loan Documents. The agreements of each Borrower set forth in this Article 9
shall survive termination of this Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
▇▇▇▇▇.▇▇▇, INC.
By:
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------------
Title: Chief Financial Officer
--------------------------------------------
AELIX, INC.
By:
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
----------------------------------------------
Title: Director
-------------------------------------------
Address for Notices:
-------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ INTERESTS, LLC,
as Agent and as Lender
By:
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
----------------------------------------------
Title: Manager
-------------------------------------------
Address for Notices:
-------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
LENDERS:
APEX INVESTMENT FUND III, L.P.
By:
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Managing General Partner
--------------------------------------------
Address for Notices:
-------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
APEX STRATEGIC PARTNERS, LLC
By:
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Managing Member of the Manager
--------------------------------------------
Address for Notices:
-------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ COMMUNICATIONS
CORPORATION
By:
----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Chief Financial Officer
--------------------------------------------
Address for Notices:
-------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
CUSTOMER CARE & TECHNOLOGY
HOLDINGS, INC.
By:
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
---------------------------------------------
Title: Chief Financial Officer
--------------------------------------------
Address for Notices:
-------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
A-1
Exhibit A
------------------------------------------- ----------------- ---------------
Lender Amount Maturity Date
------------------------------------------- ----------------- ---------------
▇▇▇▇▇▇▇▇ Interests, LLC $2,218,000.00 May 31, 2001
Apex Investment Fund III, L.P. $2,041,762.25 May 31, 2001
Apex Strategic Partners, LLC $108,236.79 May 31, 2001
▇▇▇▇▇▇▇▇ Communications Corporation May 31, 2001
$3,022,000.00
Customer Care & Technology May 31, 2001
Holdings, Inc. $275,000.00
-----------------
Total $7,664,999.04
------------------------------------------- ----------------- ---------------