EXHIBIT 10.4
CONSENT, WAIVER AND ACKNOWLEDGEMENT
THIS CONSENT, WAIVER AND ACKNOWLEDGEMENT (this "Consent"), dated as of
August 3, 2005, is by and among VOIP, INC. ("Parent"), and CAERUS, INC.
("Caerus"), VOLO COMMUNICATIONS, INC.("Volo"), CAERUS NETWORKS, INC., CAERUS
BILLING, INC. and the subsidiaries of Volo that are signatories hereto
(collectively, the "Corporation"), and CEDAR BOULEVARD LEASE FUNDING, INC. (the
"Lender").
WHEREAS, the Corporation and Lender are parties to that certain
Subordinated Loan and Security Agreement, dated as of June 1, 2004 (the "Credit
Agreement"), pursuant to which the Corporation established a credit facility
with Lender;
WHEREAS, Parent, the sole stockholder of Caerus and guarantor of the
obligations of the Corporation under the Credit Agreement, intends to purchase
substantially all of the assets (the "Asset Purchase") of WQN, Inc. ("WQN"),
pursuant to an Asset Purchase Agreement, dated August 1, 2005, between Parent
and WQN (the "Asset Purchase Agreement") and, in connection therewith, issue to
WQN a bridge note, in the principal amount of $1 million, (the "Bridge Note"),
and, upon closing of the transactions contemplated by the Asset Purchase
Agreement, issue a Convertible Promissory Note, in the principal amount of $3.7
million to WQN (the "Convertible Note," together with the Bridge Note, the
"Notes"), which Notes shall be secured by a junior security interest in the
assets of Parent (which assets include the Corporation); and
WHEREAS, it is a condition to the execution of the Asset Purchase
Agreement, the issuance of the Bridge Note and the subsequent completion of the
Asset Purchase and issuance of the Convertible Note, that Lender (1) acknowledge
that the Corporation is not in default of the Credit Agreement or other Loan
Agreements (as defined in the Credit Agreement), and (2) consent to certain
matters.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties to this Consent hereby
agree as follows:
1. ACKNOWLEDGEMENT. Lender hereby represents and acknowledges that, to the
best of its knowledge, no Event of Default (as defined in the Credit Agreement)
under the Credit Agreement or any default under any of the other Loan Agreements
presently exists, or is continuing or will result from the transactions
contemplated by the Asset Purchase Agreement, except to the extent that the
Credit Agreement is concurrently being amended to provide that it shall be an
Event of Default if Parent is obligated to make any cash payments to WQN under
that certain Convertible Note to be issued by Parent in favor of WQN upon
closing of the Asset Purchase (the "WQN Note") because Parent fails to file a
Certificate of Designation establishing a series of Preferred Stock as required
under the WQN Note (as the same may be amended from time to time).
2. CONSENT AND WAIVER OF RIGHTS. Lender hereby consents to the Asset
Purchase and the transactions contemplated by the Asset Purchase Agreement,
including, but not limited to, the issuance of the Notes and the creation of the
security interest in favor of WQN and hereby waives Sections 7.01(b), (f) and
(j) of the Credit Agreement in connection with the Asset Purchase.
3. NO FURTHER WAIVER. Lender is not waiving any rights with respect to
Sections 7.01(b), (f) and (j) or any of the other provisions of the Credit
Agreement with respect to any transaction or event other than those contemplated
in connection with the Asset Purchase. Lender reserves the right, in its
discretion, to exercise any or all of its rights and remedies under the Credit
Agreement or any of the other Loan Documents (as defined in the Credit
Agreement) as a result of any Events of Default that may be continuing as of the
date hereof or any Event of Default that may occur after the date hereof, and
Lender has not waived any of such rights or remedies, and nothing in this
Agreement, and no delay on its part in exercising any such rights or remedies,
should be construed as a waiver of any such rights or remedies.
4. NOTICES. All notices and communications to be given or otherwise made
to any party to this Consent shall be deemed to be sufficient if contained in a
written instrument delivered in person or by telecopier or duly sent by first
class registered or certified mail, return receipt requested, postage prepaid,
or by overnight courier, addressed to such party at the address set forth below:
(a) if to the Parent, to:
VoIP, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(b) if to the Corporation, to:
Caerus, Inc.
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(c) if to Lender, to:
Cedar Boulevard Lease Funding, LLC
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Attention: ▇▇▇ ▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇ LLP
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Attention:
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith.
5. SUCCESSORS AND ASSIGNS. This Consent shall bind and inure to the
benefit of the parties hereto and the respective successors and permitted
assigns of the parties hereto.
6. ENTIRE AGREEMENT. This Consent and the other writings referred to
herein contain the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous arrangements
or understandings with respect thereto.
7. FURTHER ASSURANCES. Lender agrees to execute and deliver such
additional documents as may be reasonably requested by Parent or the Corporation
to effect or more fully reflect the transactions contemplated by this Consent.
8. COUNTERPARTS. This Consent may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
9. HEADINGS. The headings of the various sections of this Consent have
been inserted for convenience of reference only and shall not be deemed to be a
part of this Consent.
10. GOVERNING LAW. This Consent shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to contracts made
and to be performed wholly therein (without reference to any principles of
conflicts of laws).
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IN WITNESS WHEREOF, the parties have entered into this Agreement to be
effective as of the date first above written.
LENDER:
CEDAR BOULEVARD LEASE FUNDING LLC, a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
PARENT:
VOIP, INC.
A Texas corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
BORROWERS:
CAERUS, INC., VOLO COMMUNICATIONS, INC.,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
CAERUS NETWORKS, INC., CAERUS BILLING, INC.,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
Signature Page 1 of 4
VOLO COMMUNICATIONS OF ARIZONA, INC., VOLO COMMUNICATIONS OF CALIFORNIA,
a Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF COLORADO, INC., VOLO COMMUNICATIONS OF CONNECTICUT,
a Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF DELAWARE, INC., VOLO COMMUNICATIONS OF FLORIDA, INC.,
a Delaware corporation d/b/a Volo Communications Group of
Florida, Inc., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF GEORGIA, INC., VOLO COMMUNICATIONS OF IDAHO, INC., a
a Delaware corporation Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF ILLINOIS, INC., VOLO COMMUNICATIONS OF INDIANA, INC.,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
Signature Page 2 of 4
VOLO COMMUNICATIONS OF MARYLAND, INC., VOLO COMMUNICATIONS OF MASSACHUSETTS,
a Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF MICHIGAN, INC., VOLO COMMUNICATIONS OF NEVADA, INC.,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF NEW HAMPSHIRE, VOLO COMMUNICATIONS OF NEW JERSEY,
INC., a Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF NEW YORK, INC., VOLO COMMUNICATIONS OF NORTH CAROLINA
a Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF OHIO, INC., a VOLO COMMUNICATIONS OF PENNSYLVANIA,
Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
Signature Page 3 of 4
VOLO COMMUNICATIONS OF RHODE ISLAND, VOLO COMMUNICATIONS OF TEXAS, INC., a
INC., a Delaware corporation Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF VERMONT, INC., VOLO COMMUNICATIONS OF VIRGINIA, INC.,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF WASHINGTON, INC., VOLO COMMUNICATIONS OF WISCONSIN,
a Delaware corporation INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: President
VOLO COMMUNICATIONS OF SOUTH CAROLINA,
INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Signature Page 4 of 4