FORM OF AMENDMENT NO 1. TO CONVERTIBLE PROMISSORY NOTE
Exhibit
10.1
FORM
OF AMENDMENT NO 1. TO
AMENDMENT
NO. 1 TO CONVERTIBLE PROMISSORY NOTE (this “Amendment”), dated as of
________________, by and among Verilink Corporation, a Delaware corporation,
with headquarters located at 00000 X. Xxxxxxxx Xx., Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000 (the “Company”) and ______________ (the “Holder”).
RECITALS:
A. The
Company has issued to the Holder that certain Convertible Promissory Note
dated
February 5, 2004 in the original principal amount of $___________ (the “Note”)
of which $__________ in principal amount remains outstanding, together with
unpaid interest on such outstanding balance accruing since November 15,
2005.
B. The
Company and the Holder desire to enter into this Amendment pursuant to which
the
Note shall be amended to revise certain terms set forth therein.
C. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed to them in the Note.
NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises
hereinafter set forth, the Company and the Investors hereby agree as
follows:
1. AMENDMENT
TO CONVERTIBLE PROMISSORY NOTE.
(a) Effective
as of February 5, 2006, the annual rate of interest referenced in the first
paragraph of the Note is hereby amended to read “ten percent (10%)” rather than
the “seven percent (7%)” as currently set forth in such paragraph.
(b) Section
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of the Convertible Promissory Note is hereby amended and restated to read
in its
entirety as follows:
“Maker
shall pay all accrued and unpaid interest under this Note on each May 15,
August
15, November 15 and February 15 until the Principal Commencement Date. Beginning
with the Principal Commencement Date and for so long as the indebtedness
evidenced by this Note shall remain outstanding, Maker shall pay, on the
fifteenth day of each month monthly installment payments in the amount of
1/12th
of the
outstanding principal amount as of the Principal Commencement Date plus accrued
and unpaid interest to such installment payment date. For purposes of this
Note,
“Principal Commencement Date” shall mean the fifteenth day of the month
following the date on which the Maker’s Senior Subordinated Convertible Notes
are paid, converted, or redeemed in full and are no longer outstanding. To
the
extent not previously paid or converted as provided herein, the principal
under
this Note shall be due and payable on the earlier of (i) the date that is
the
first anniversary of the Principal Commencement
Date
and
(ii) February 6, 2009 (the earlier of such dates being referred to as the
“Maturity Date”).
Principal
and interest shall be payable to Holder when due in lawful money of the United
States of America in immediately available funds at such place as Holder
may
from time to time notify the Maker in writing. The Maker may prepay this
Note,
in whole or in part, at any time, by giving Holder thirty (30) days’ written
notice of its election to so prepay. After notice of such prepayment has
been
given to Holder, but prior to actual prepayment by Maker, Holder shall continue
to have the conversion privilege set forth in Section 5 hereof.”
(c) Section
7
of the Convertible Promissory Note is hereby amended by adding a new sub-section
7(b) as follows:
“(b)
Without the consent of the Holder and so long as the Indebtedness represented
by
this Note remains outstanding, Maker shall not incur any indebtedness ranking
senior in right of payment to or on parity with this Note, other than (i)
Maker’s obligations with respect to its 7% Senior Secured Convertible
Notes and associated warrants and related transaction documents (the “Senior
Notes”), including
any amendments, restructurings, refinancings or other modifications
thereof, provided, however, that with regard to any such amendments,
restructurings, refinancings or modifications, the average life to maturity
of
such new Indebtedness is less than or equal to that of the Senior Notes,
and the
principal amount of such new Indebtedness is less than or equal to the principal
amount plus accrued and unpaid interest and other charges outstanding under
the
Senior Notes, at the time of such amendment, restructuring refinancing or
modification, (ii) other Indebtedness as of the date hereof, including any
modifications, extensions, amendments or renewals thereof and (iii) Indebtedness
incurred in the ordinary course of business, including but not limited to
purchase money indebtedness and capital lease obligations incurred to acquire
property in the ordinary course of business. For purposes of this Note,
“Indebtedness” shall mean indebtedness for borrowed money.”
(d) Section
7
of the Convertible Promissory Note is hereby amended by adding a new sub-section
7(c) as follows:
“(c)
Without the consent of the Holder and so long as the indebtedness represented
by
this Note remains outstanding, Maker shall not create or incur or assume
any
consensual liens upon any of its property or assets that secure indebtedness,
other than (i) liens securing indebtedness or obligations permitted under
Section 7(b), including any new Indebtedness permitted under subsection (i)
thereof; (ii) if the validity or amount thereof is being contested in good
faith
by appropriate and lawful proceedings: (a) liens for taxes, assessments or
charges due and payable and subject to interest or penalty; (b) liens upon,
and
defects of title to, real or personal property, including any attachment
of
personal or real property or other legal process prior to adjudication of
a
dispute on the merits; (c) liens of mechanics, materialmen, warehousemen,
carriers, or other like liens; and (d) adverse judgments on appeal; (iii)
pledges or deposits made in the ordinary course of business, including but
not
limited to purchase money security interests granted in the ordinary course
of
business; and (iv) easements arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of real property
which do not materially detract from the value of such real property or
interfere with the ordinary conduct of the business conducted and proposed
to be
conducted at such real property.”
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2. DISCLOSURE
OF AMENDMENT.
The
Company shall promptly file a Current Report on Form 8-K describing the terms
of
this Amendment and attaching a copy of the form of this Amendment.
3. REPRESENTATIONS
AND WARRANTIES OF MAKER.
(a) Authority.
This
Amendment constitutes the legal, valid, and binding obligation of the Company,
enforceable against the Company in accordance with its terms. The Company
has
the requisite corporate power, and authority to execute and deliver this
Amendment and to perform its obligations under the Note as amended by this
Amendment.
(b) No
Default.
The
execution and delivery of this Amendment by the Company will not give any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
(a
“Person”) the right to prevent, delay, or otherwise interfere with any of the
obligations of the Company under the Note as amended by this Amendment
or:
(i)
contravene,
conflict with, or result in a violation of (A) any provision of the Certificate
of Incorporation or Bylaws of the Company, or (B) any resolution adopted
by the
board of directors or the stockholders of the Company;
(ii)
contravene,
conflict
with, or
result in a violation of, or give any Person the right to challenge this
Amendment or to exercise any remedy or obtain any relief under, any legal
requirement or any order to which the Company, or any of the assets owned
or
used by the Company, may be subject;
(iii)
contravene,
conflict with, or result in a violation or breach of any provision of, or
give
any Person the right to declare a default or exercise any remedy under, or
to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any agreement, contract, debt, obligation, promise, or undertaking (whether
written or oral and whether express or implied) that is legally binding to
which
the Company is a party or by which the Company or any of its properties may
be
bound.
(c) Third
Party Consents.
Except
for such Consents (as defined below) as have been obtained by the Company
in
writing and delivered in writing to Holder, the Company is not and will not
be
required to obtain any approval, consent, ratification, waiver, or other
authorization (“Consent”) from any Person, including, but not limited to, any
lender, creditor or shareholder of the Company in connection with the execution
and delivery of this Amendment or the performance of the obligations of the
Company under the Note as amended by this Amendment.
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4. MISCELLANEOUS.
(a) Counterparts.
This
Amendment maybe executed in two or more identical counterparts, all
of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution
and
shall be binding upon the signatory thereto with the same force and effect
as if
the signature were an original, not a facsimile signature.
(b) Headings.
The
headings of this Amendment are for convenience of reference and shall not
form
part of, or affect the interpretation of, this Amendment.
(c) Severability.
If any
provision of this Amendment shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Amendment in that jurisdiction
or the
validity or enforceability of any provision of this Amendment in any other
jurisdiction.
(d) No
Third Party Beneficiaries.
This
Amendment is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may
any
provision hereof be enforced by, any other Person.
(e) Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Amendment
and the consummation of the transactions contemplated hereby.
(f) No
Strict Construction.
The
language used in this Amendment will be deemed to be the language chosen
by the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
(g) Reaffirmation.
The
Company hereby confirms and agrees that the Note is, and shall continue to
be,
in full force and effect and is hereby ratified and confirmed in all respects
as
amended by this Amendment.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Company and Holder have caused this Amendment to be
duly
executed as of the date first written above.
COMPANY:
VERILINK
CORPORATION,
a
Delaware corporation
By:
________________________
Name:
Title:
HOLDER:
_____________________________
By:
__________________________
Name:
Title:
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