EXHIBIT 10.2
AMENDMENT NUMBER 1
TO
SECURITIES PURCHASE AGREEMENT
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THIS IS AMENDMENT NUMBER 1 (the "Amendment") being executed and
delivered by and between Dial-Thru International Corporation, a Delaware
corporation ("Dial-Thru"), and GCA Strategic Investment Fund Limited, a
Bermuda corporation ("GCASIF"), and dated as of June 1, 2005 in order to
amend that certain Securities Purchase Agreement by and between Dial-Thru
and the GCASIF dated as of January 28, 2002 (the "Securities Purchase
Agreement").
RECITALS
A. The parties to this Amendment wish to (i) amend certain terms of
that certain secured promissory note dated as of January 28, 2002 in the
principal amount of $550,000 issued pursuant to the Securities Purchase
Agreement (the "Primary Note"), (ii) restructure the obligations underlying
the Primary Note, including the Maturity Date, and (iii) waive any and all
Events of Default arising prior to the date hereof under the Securities
Purchase Agreement, all as further set forth below.
B. In consideration of the accommodations, amendments and waivers
set forth in this Amendment, Dial Thru will issue to GCASIF presently
exercisable warrant to purchase 260,000 shares of Dial Thru's Common
Stock (the "Warrants"), on the terms and conditions set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises contained in
this Amendment and other good and valuable consideration, the sufficiency,
mutuality and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Amendment of the Primary Note. The Primary Note shall be amended
and restated such that the Maturity Date shall be changed to November 26,
2005.
2. Fee. In further consideration of this Amendment and the waivers
set forth below, Dial Thru shall issue 100,000 shares (the "Shares") of the
company's Common Stock to GCASIF.
3. Waiver of Events of Default. On issuance of the Shares any and all
prior Events of Default set forth in Article 12 of the Securities Purchase
Agreement, including without limitation, in Section 12.1(a) and (b), shall
be deemed waived without further recourse by GCASIF.
4. Right of First Refusal. The parties acknowledge that, as further
set forth in Section 8.6 of the Securities Purchase Agreement, GCASIF has a
right of first refusal with respect to any Discounted Equity Offering that
Dial Thru seeks to complete (a "New Offering"). In that regard, Dial Thru
will abide by the terms of Section 8.6 with respect to any New Offering
and will otherwise present the terms and conditions thereof to GCASIF as
required by Section 8.6. If GCASIF elects not to exercise its right of first
refusal with respect to any New Offering, then, in connection with Dial
Thru's completion of such offering, GCASIF agrees to consider in good faith
the terms and conditions of any subordination and intercreditor agreement
which may be requested by any investor/lender in such New Offering.
5. Issuance of Warrant; Additional Waivers. In connection with the
amendment of the Primary Note and as consideration for the waivers and
accommodations agreed to by GCASIF in this Amendment, Dial Thru shall
issue the Warrants to GCASIF, which shall be substantially in the form of
Exhibit A hereto. On receipt of the Shares and the Warrants, GCASIF shall
conditionally waive any and all (a) breaches, violations and Events of
Default by Dial Thru arising prior to the date hereof under or pursuant
to the Securities Purchase Agreement, including without limitation, any
Registration Default (including any violation of Section 3.4(a) in respect
thereof) and any Event of Default set forth in Sections 12.1(d), (e), (i)
and (l) and (b) all damages, costs, fees and expenses arising directly or
indirectly from such breaches, violations and defaults, including without
limitation, any and all accrued amounts arising from or pursuant to default
interest rates and liquidated damages that otherwise may be due and owing
by Dial Thru under the Securities Purchase Agreement; provided however,
that in the event of any default occurring after the Effective Date of this
Amendment under the Transaction Documents, as that term is defined in the
Securities Purchase Agreement, including any breach of this Amendment, then
all damages, costs, fees and expenses arising directly or indirectly from
such breaches, violations and defaults, including without limitation, any
and all accrued amounts arising from or pursuant to default interest rates
and liquidated damages as of the Effective Date that otherwise may be due
and owing by Dial Thru under the Securities Purchase Agreement shall become
an obligation of Dial Thru and the foregoing waiver shall be null and void;
provided further that, in the interest of clarity, GCASIF has not declared
any event of Default under any of the Transaction Documents as of the
Effective Date.
6. Waiver of Rights under Section 3.4(b). In further consideration
of the Shares and the Warrants, GCASIF waives its rights to the mandatory
prepayments required pursuant to Section 3.4(b) of the Securities Purchase
Agreement upon the consummation of one or more Financings, as that term is
defined in the Securities Purchase Agreement, up to the first Five Million
Dollars ($5,000,000) in Financings following the Effective Date.
7. Registration Agreement. In connection with this Amendment, if Dial
Thru files a registration statement on form SB-1 in connection with any new
financing agreement at any time prior to the maturity date of the Primary
Note, then Dial Thru shall include in the registration statement a
sufficient number of shares to allow for the full conversion of the Primary
Note plus any accrued but unpaid interest thereon, the Shares and the full
exercise of all Warrants held by GCASIF including the Warrants issued
concurrently herewith. Dial Thru shall use its best efforts to include
GCASIF as a party to the registration rights agreement prepared in
connection with such New Offering.
8. No Other Effect on the Securities Purchase Agreement. Except as
amended by this Amendment, the Securities Purchase Agreement remains in full
force and effect.
9. Effective Date. This Amendment shall be effective as of June 1,
2005 (the "Effective Date").
10. Miscellaneous.
(a) Captions; Certain Definitions. Titles and captions of
or in this Amendment are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Amendment or the intent of any of its provisions. All capitalized terms not
otherwise defined herein shall have the meaning therefor, as set forth in
the Securities Purchase Agreement
(b) Controlling Law. This Amendment is governed by, and shall be
construed and enforced in accordance with the laws of the State of Delaware
(except the laws of that jurisdiction that would render such choice of laws
ineffective).
(c) Counterparts. This Amendment may be executed in one or more
counterparts (one counterpart reflecting the signatures of all parties),
each of which shall be deemed to be an original, and it shall not be
necessary in making proof of this Amendment or its terms to account for more
than one of such counterparts. This Amendment may be executed by each party
upon a separate copy, and one or more execution pages may be detached from a
copy of this Amendment and attached to another copy in order to form one or
more counterparts.
Signatures on following page
IN WITNESS WHEREOF, this Amendment has been executed and delivered by
Dial-Thru and GCASIF as of the date first set forth above.
Dial-Thru: Dial-Thru International Corporation
By: ___________________________________
Name: ___________________________________
Title:___________________________________
GCASIF: GCA STRATEGIC INVESTMENT FUND LIMITED
By: ___________________________________
Name: ___________________________________
Title:___________________________________
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