Exhibti 99.1
AMENDMENT NO. 1 TO LOAN DOCUMENTS
This AMENDMENT NO. 1 TO LOAN DOCUMENTS (this "Amendment"), dated as of
October 3, 2007, is entered into by and among SWMX, Inc., a Delaware
corporation, and Softwave Media Exchange, Inc., a Delaware corporation
(jointly and severally, the "Borrower"), and BlueCrest Capital Finance, L.P.
(the "Lender"), with respect to the following:
A. The Borrower and the Lender have previously entered into that certain
Loan and Security Agreement No. V07106 dated as of March 23, 2007 (the "Existing
Credit Agreement" and as the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time, including, but not limited
to, by this Amendment, the "Credit Agreement"). Capitalized terms used but not
defined in this Amendment shall have the meanings ascribed to such terms in the
Credit Agreement.
B. The Borrower has requested certain amendments to the Existing Credit
Agreement and Other Agreements as set forth below.
C. The Lender is willing to grant such requests on the terms and subject
to the conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. EFFECTIVENESS. The effectiveness of the provisions of Sections 2
and 3 of this Amendment is subject to the satisfaction of the conditions further
described in Section 4 of this Amendment.
2. WAIVER.
(a) On the terms of this waiver and subject to the
satisfaction of the conditions precedent set forth in Section 4 below, the
Lender hereby waives the Events of Default under the Existing Credit Agreement
arising from (i) prior to the Amendment Effective Date, Borrower's failure to
deliver the financial statements required under Sections 7.3(ii), (iii) and (iv)
of the Existing Credit Agreement within the time period specified therein, (ii)
Borrower's failure to comply with the requirements of Section 8.1(o) of the
Existing Credit Agreement, (iii) Borrower's failure to make the principal and
interest payments due on the Term Loan on August 1, 2007, September 1, 2007 and
October 1, 2007, and (iv) Borrower's failure to comply with Section 8.1(n) of
the Existing Credit Agreement arising from the payment defaults previously
disclosed to Lender in writing by the Borrower.
(b) The waiver given herein is strictly limited to its terms
and shall not have any force and effect other than as expressly set forth
herein. The Lender specifically retains all its present and future rights under
the Credit Agreement, including rights in connection with the representations,
conditions and covenants thereof, except as specifically modified by the limited
waiver described in Section 2(a) of this Amendment. No further waiver, either of
additional terms or for any additional period, or consents of any kind, shall be
implied from the waiver granted herein. Without limiting the foregoing, the
Borrower expressly acknowledges that the Lender has not made any statement,
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promise or commitment, or given any promise or assurance, express or implied,
that any waiver would be granted in the future.
3. AMENDMENTS.
(a) GENERAL DEFINITIONS. On the terms and subject to the
conditions of this Amendment, Section 1 of the Existing Credit Agreement is
hereby amended as follows:
(1) The following definitions in Section 1 of the
Existing Credit Agreement are hereby amended and restated in their entirety to
read as follows:
"PP. "Other Agreements" means all agreements, instruments
and documents, including, without limitation, the Warrants, the Lock
Box Agreement, any notes, guaranties, letters of credit, mortgages,
deeds of trust, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, warrants, account
pledge and control agreements, fee arrangements, financing statements
and all other written matter heretofore, now and/or from time to time
hereafter executed by and/or on behalf and/or for the benefit of
Borrower and delivered to Lender."
"AAA. "Revolving Commitment" means the commitment, if
any, of Lender to make Revolving Advances hereunder, subject to the
terms hereof, in an aggregate amount up to Three Million Five Hundred
Thousand and No/100 Dollars ($3,500,000.00), as such commitment may
be reduced from time to time pursuant to Section 4.3 or Section 8.2."
"CCC. "Revolving Loan Termination Date" means the
earliest of (a) January 31, 2008, (b) the date of termination of the
Revolving Commitments pursuant to Section 4.3 hereof and (c) the date
on which Borrower Liabilities become due and payable pursuant to
Section 8.2 hereof."
(2) The following new definitions shall be added to Section 1
of the Existing Credit Agreement to be added in the appropriate
alphabetical order:
"Amendment Closing Date" shall mean October 3, 2007.
"Cash Flow Forecast" shall mean the Borrower's forecasted
Weekly Cash Flows and Weekly Cash Balance for the period from the Amendment
Closing Date to January 31, 2008, in the form delivered by Borrower to Lender on
October 3, 2007.
"First Amendment to Loan Documents" shall mean that certain
Amendment No. 1 to Loan Documents, dated as of October 3, 2007, among Lender and
Borrower.
"Lock Boxes" shall mean the post office boxes described in the
Lock Box Agreement.
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"Lock Box Account" shall mean the "Account" as defined in the
Lock Box Agreement.
"Lock Box Agreement" shall mean a Deposit Account Control
Agreement with respect to the Lock Box Account with a financial institution and
in such form as shall be acceptable to Lender in its sole discretion.
"Revolving Loan Termination Fee" shall mean an amount equal to
the amount set forth below:
DATE OF PAYMENT IN FULL OF REVOLVING LOAN AND REVOLVING LOAN
TERMINATION OF REVOLVING COMMITMENT TERMINATION
FEE
On or prior to December 31, 2007 $130,000
From January 1, 2008 to and including January 30, 2008 $200,000
January 31, 2008 $250,000
From February 1, 2008 to and including February 15, 2008 $350,000
From February 16, 2008 to and including February 29, 2008 $450,000
From March 1, 2008 to and including March 15, 2008 $600,000
On or after March 16, 2008 $750,000
"Weekly Cash Balance" shall mean the Borrower's unrestricted
cash balance in accordance with GAAP as of 5 p.m., Eastern Standard Time, as of
the end of each applicable week, as shown on the Weekly Cash Report.
"Weekly Cash Flows" shall mean the Borrower's actual cash
receipts, disbursements and the resulting net cash flow for the applicable week
in each case in accordance with GAAP, as reported in the Weekly Cash Report.
"Weekly Cash Report" has the meaning set forth in Section
7.3(vi) hereof.
(b) THE LOANS. On the terms and subject to the conditions of
this Amendment, Section 2.1 of the Existing Credit Agreement is hereby amended
as follows:
(1) TERM LOAN. The third sentence of Section
2.1(a) of the Existing Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"The Term Loan shall be repaid in monthly scheduled
installments as follows: (i) on the Amendment Closing Date, the
principal and interest payments that were due on August 1, 2007 and
September 1, 2007 under the Existing Credit Agreement (together with
all applicable service charges and default interest thereon); (ii) on
the Amendment Closing Date, any accrued and unpaid interest
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calculated with an interest rate equal to 12.84%, (iii) commencing on
November 1, 2007 and on the first Business Day of each month
thereafter, up to and including January 1, 2008, three (3) monthly
payments, each of interest only (paid in arrears); and finally, (iv)
on January 31, 2008, the entire unpaid principal amount of the Term
Loan, plus interest thereon, and the Terminal Payment."
(2) REVOLVING LOAN. Section 2.1(b) of the Existing
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"(b) REVOLVING LOAN. On the terms and subject to the
conditions contained in this Loan Agreement, Lender agrees to make
revolving advances to Borrower (each, a "Revolving Advance") from
time to time on any Business Day during the period from the date
hereof until the Revolving Loan Termination Date in an aggregate
principal amount at any time outstanding for all such Revolving
Advances not to exceed the Revolving Commitment. Each borrowing of a
Revolving Advance (other than a Revolving Advance made on the
Amendment Closing Date) shall be made on notice (substantially in the
form of Exhibit B hereto) given by Borrower to Lender not later than
9:00 a.m. (prevailing Chicago time) not less than five (5) Business
Days prior to the date of such proposed borrowing. On the Amendment
Closing Date, Borrower shall make a borrowing of a Revolving Advance
in an amount not less than $750,000. Thereafter, each borrowing of a
Revolving Advance shall be in an aggregate amount of not less than
$200,000 and in increments of $50,000. Borrower may not borrow more
than two (2) Revolving Advances in any calendar month. On and after
the Amendment Closing Date, the proceeds of each Revolving Advance
shall be used solely to pay (i) fees, expenses and other amounts due
hereunder, (ii) operating expenses incurred by Borrower in the
ordinary course of business after the Amendment Closing Date, (ii)
accounts payable that (A) were incurred by Borrower in the ordinary
course of business prior to the Amendment Closing Date, (B) are owed
to Persons that are not Affiliates of Borrower and (C) were incurred
in accordance with the Cash Flow Forecast, and (iii) up to $350,000
of additional Borrower's accounts payable payables owed by the
Borrower to radio stations for media purchases outstanding as of the
Amendment Closing Date. Subject to the terms and conditions contained
in this Loan Agreement, the Revolving Loan repaid may be reborrowed
by Borrower under this Section 2.1(b). Borrower shall repay the
entire unpaid principal amount of the Revolving Loan, plus any fees
and interest thereon, in full on the Revolving Loan Termination
Date."
(c) EVIDENCE AND NATURE OF LOANS. On the terms and subject to
the conditions of this Amendment, the first sentence of Section 2.2 of the
Existing Credit Agreement is hereby amended and restated in its entirety
to read as follows:
"The Term Loan and the Revolving Loan made by Lender to
Borrower pursuant to this Loan Agreement (each, a "Loan") will be
evidenced by one or more promissory notes (in form and substance
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satisfactory to Lender) to be executed and delivered by Borrower to
Lender before or concurrently with Lender's disbursement of such Loan
to or for the account of Borrower."
(d) CONDITIONS PRECEDENT.
(i) On the terms and subject to the conditions of this
Amendment, Section 2.5(a) of the Existing Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) The following conditions precedent must be met
before each Loan is made hereunder: (i) No event, condition or change
that has had, or could reasonably be expected to have, a Material
Adverse Effect shall have occurred since the date of the First
Amendment to Loan Documents, (ii) The representations and warranties
contained in this Loan Agreement and in the Other Agreements shall be
true and correct on and as of the date of such Loan, (iii) As of the
date of such Loan, no event shall have occurred and be continuing or
would result from such Loan or the application of the proceeds
thereof that would constitute an Event of Default or a Default
(unless such Event of Default or Default has been waived in writing
by Lender), and (iv) Such other conditions precedent as Lender may
reasonably impose upon Borrower from time to time. With respect to
the conditions set forth in clauses (i), (ii), and (iii) of this
Section 2.5(a), each of such conditions shall be met before each Loan
is made hereunder, except as disclosed in writing to Lender."
(ii) On the terms and subject to the conditions of this
Amendment, Section 2.5(b)(xi) is deleted in its entirety.
(e) INTEREST. On the terms and subject to the conditions of
this Amendment, the first two sentences of Section 3.1 of the Existing
Credit Agreement are hereby amended and restated in their entirety to read
as follows:
"Each Revolving Advance made pursuant to this Loan
Agreement shall bear interest payable monthly in arrears on the first
Business Day of each month calculated on the basis of a 360 day year
and actual days elapsed at a rate equal to the Prime Rate plus (i)
1.65% per annum prior to the Amendment Closing Date, and (ii) 5.00%
per annum on and after the Amendment Closing Date. The Term Loan
shall bear interest payable monthly in arrears on the first Business
Day of each month, calculated on a 360 day year comprised of twelve
(12) thirty day months at a per annum rate equal to the (x) Loan
Interest Rate specified in the related note prior to the Amendment
Closing Date, which rate shall be 10.84%, and (y) Loan Interest Rate
specified in the related amended and restated note on and after the
Amendment Closing Date, which rate shall be 12.84%."
(f) FEES. On the terms and subject to the conditions of this
Amendment, Section 3.2(a) is deleted in its entirety.
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(g) TERM AND PREPAYMENT. On the terms and subject to the
conditions of this Amendment, Section 4 of the Existing Credit Agreement is
hereby amended as follows:
(1) MANDATORY PREPAYMENT OF REVOLVING LOAN. Section 4.2
of the Existing Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"4.2 MANDATORY PREPAYMENT OF REVOLVING LOAN. In the event
the aggregate outstanding principal amount of the Revolving Advances
at any time exceeds the Revolving Commitment, Borrower shall
promptly, but not later than three (3) Business Days, prepay the
Revolving Loan in an amount equal to such excess."
(2) VOLUNTARY PREPAYMENT AND COMMITMENT REDUCTION.
Sections 4.3(a) and (b) of the Existing Credit Agreement are hereby amended and
restated in their entirety to read as follows:
"(a) Borrower may upon at least ten (10) Business Days'
written notice to Lender, prepay, except as provided in Section 4.3(b)
below, without premium or penalty the outstanding principal amount of any
or all of the Revolving Loan, plus any fees and interest thereon, in whole
or in part at any time; provided, that each partial prepayment shall be an
aggregate principal amount not less than $200,000. Upon the giving of such
notice of prepayment, the principal amount of Revolving Loan specified to
be prepaid shall become due and payable on the date specified for such
prepayment."
"(b) Borrower may, upon at least thirty (30) days' written
notice to Lender, terminate in whole or reduce in part the unused portion
of the Revolving Commitment; provided, however, that (i) each partial
reduction shall be in an aggregate amount of not less than $500,000, (ii)
Borrower shall not reduce the Revolving Commitment if, after giving effect
to any concurrent prepayment of the Revolving Loan in accordance with
Section 4.3(a), the aggregate unpaid principal amount of the Revolving
Advances would exceed the total Revolving Commitment and (iii) Borrower
shall pay the Revolving Loan Termination Fee concurrently with any
repayment in full of the Revolving Loan and termination in whole of the
Revolving Commitment."
(h) BOARD OBSERVER RIGHTS. On the terms and subject to the
conditions of this Amendment, the Existing Credit Agreement is hereby
amended to add the following new Section 5.10:
"5.10 BOARD OBSERVER RIGHTS. The Lender shall have the right
to designate a representative (the "Representative") to attend all
meetings of each Borrower's Board of Directors, either in person or
through video conference call (if available) or telephone, in a non-voting
observer capacity, except for that part of any meeting which deals with
take out financing or acquisition offers. Each Borrower shall give the
Representative copies of all notices, agenda, minutes, consents and other
materials that it provides to its directors in the same manner and at the
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same time as it provides such information to its directors, except for
materials about take out financing or acquisition offers."
(i) LOCKBOX ACCOUNT. On the terms and subject to the
conditions of this Amendment, the Existing Credit Agreement is hereby amended to
add the following new Section 5.11:
"5.11 LOCK BOX ACCOUNT.
(a) On or prior to November 15, 2007, Borrower shall
enter into a Lockbox Agreement. If by December 31, 2007, Borrower shall
not have received a commitment letter negotiated in good faith with a bona
fide investor to refinance the Loans in full by January 31, 2008, Borrower
shall instruct all Account Debtors to pay all Accounts directly to the
Lock Boxes and otherwise take such reasonable steps to ensure that all
Account Debtors forward payment directly to such Lock Boxes. If,
notwithstanding such instructions, Borrower receives any payments on
Accounts, Borrower shall deposit, in no event later than the first
Business Day after the date of receipt thereof, such payments into the
Lock Box Account.
(b) The Lock Boxes shall be cash collateral accounts,
with all cash, checks and other similar items of payment in such accounts
securing payment of the Loans and all other of Borrower's Liabilities, and
in which Borrower shall have granted a lien to Lender.
(c) Borrower shall and shall cause its Affiliates,
officers, employees, agents, directors or other Persons acting for or in
concert with Borrower (each a "Related Person") to (i) hold in trust for
Lender all checks, cash and other items of payment with respect to amounts
owed to Borrower received by Borrower or any such Related Person, and (ii)
within one (1) Business Day after receipt by Borrower or any such Related
Person of any checks, cash or other items of payment, deposit the same
into the Lock Box Account. Borrower and each Related Person thereof
acknowledges and agrees that all cash, checks or items of payment
constituting proceeds of Collateral are the property of Lender. All
proceeds of the sale or other disposition of any Collateral shall be
deposited directly into the Lock Box Account."
(j) WORK-OUT CONSULTANT. On the terms and subject to the
conditions of this Amendment, the Existing Credit Agreement is hereby amended to
add the following new Section 5.12:
"5.12 WORK-OUT CONSULTANT. Borrower shall continue to
retain a work-out consultant acceptable to Lender in its sole discretion for
the duration of the term of this Loan Agreement. Seneca Financial Group,
Inc. is acceptable to Lender"
(k) WARRANTIES AND REPRESENTATIONS. On the terms and subject
to the conditions of this Amendment, Section 6.1(k) of the Existing Credit
Agreement is hereby deleted in its entirety.
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(l) REPORTING. On the terms and subject to the conditions of
this Amendment, Section 7.3 of the Existing Credit Agreement is hereby
amended to add the following new clause (vi) and to renumber the existing
clause (vi) as clause (vii):
"(vi) no later than 9:00 a.m., Eastern Standard Time, on
Tuesday of each week, reports setting forth actual Weekly Cash Flows and
actual Weekly Cash Balance for the previous week (the "Weekly Cash
Report"),"
(m) Affirmative Covenants. On the terms and subject to the
conditions of this Amendment, Section 7.1 of the Existing Credit Agreement
is hereby amended to add the following new clause (g):
"(g) SWMX, Inc. shall take all actions necessary to increase
the number of authorized shares of Common Stock of SWMX, Inc. necessary in
order to allow Lender to purchase all of the shares of Common Stock it has
a right to purchase under the Warrant and the Additional Warrant (as
defined in the First Amendment to Loan Documents), which actions shall be
taken as soon as practical after Amendment Closing Date, but in no event
later than 30 days after Amendment Closing Date."
(n) ACCOUNTS. On the terms and subject to the conditions of
this Amendment, Section 7.4 of the Existing Credit Agreement is hereby
amended and restated in its entirety as follows:
"7.4 COVENANTS RELATING TO ACCOUNTS. As soon as available but
in any event within five (5) days of the end of each calendar month and at
such other times as may be requested by Lender as of the period then
ended, Borrower shall deliver to Lender a detailed aging of Borrower's
Accounts including all invoices aged by invoice date and due date (with an
explanation of the terms offered), together with a summary specifying the
name, address, and balance due for each Account Debtor. Borrower may not
grant any credit, discount, allowance or extension, or enter into any
agreement for any of the foregoing, except for credits, discounts,
allowances or extensions not in excess of $25,000 per transaction and any
other credit, discount, allowance or extension made or given in the
ordinary course of Borrower's business in accordance with Borrower's
historic credit and collection practices and policies without the prior
consent of Lender. Lender shall have the right at any time or times, in
Lender's name or in the name of a nominee of Lender, to verify the
validity, amount or any other matter relating to any Accounts, by mail,
telephone, facsimile transmission or otherwise."
(o) EVENTS OF DEFAULT. On the terms and subject to the
conditions of this Amendment, Section 8.1 of the Existing Credit Agreement is
hereby amended and restated in its entirety as follows:
"8.1 EVENTS OF DEFAULT. The occurrence of any one of the
following events shall constitute a default ("Event of Default") by
Borrower under this Loan Agreement: (a) if Borrower fails to pay any
principal of any Loans when due and payable or fails to pay any other
Borrower's Liabilities within three (3) days after the same are due and
payable; (b) if any representation, warranty, financial statement,
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statement, report or certificate made, deemed made or delivered by
Borrower, or any of its officers, to Lender is not true and correct when
made, deemed made or delivered; (c) if Borrower fails or neglects to
perform, keep or observe any term, provision, condition or covenant
contained in this Loan Agreement or in the Other Agreements, which is
required to be performed, kept or observed by Borrower, other than the
payment of Borrower's Liabilities, and (i) in the case of any covenant
contained in Section 7.1 hereof (other than Section 7.1(g)), the same is
not cured within fifteen (15) days or (ii) in the case of any covenant
contained in Section 7.3(vi) hereof, the same is not cured within one (1)
Business Day; (d) if any of the Collateral or any other of Borrower's
other material assets are attached, seized, subjected to a writ or
distress warrant, or are levied upon, or come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors; (e)
if the Borrower's actual Weekly Cash Flow is less than the Borrower's
forecasted Weekly Cash Flow as shown in the Cash Flow Forecast by more
than 25% and if the Borrower's actual Weekly Cash Balance is less than the
Borrower's forecasted Weekly Cash Balance as shown in the Cash Flow
Forecast by more than 15%; (f) if a petition under any section or chapter
of the Bankruptcy Code or any similar law or regulation shall be filed by
or against Borrower or if Borrower shall make an assignment for the
benefit of its creditors or if any case or proceeding is filed by Borrower
for its dissolution or liquidation, and in the case of a petition filed
against the Borrower, such action or proceeding is not being dismissed
within 45 days of its commencement; (g) if Borrower is enjoined,
restrained or in any way prevented by court order from conducting all or
any material part of its business affairs; (h) if an application is made
by Borrower or any Person for the appointment of a receiver, trustee or
custodian for the Collateral or any other of Borrower's assets, and in the
case of an application by any other Person other than the Borrower, such
application is not dismissed within 30 days of its commencement; (i) if a
notice of lien or Charges are filed of record with respect to any of the
Collateral by any Person; (j) if any Change of Control shall occur; (k) if
any money judgment, writ or warrant of attachment or similar process (if
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) individually or in the
aggregate with any other such judgment, writ or warrant of attachment or
similar process in excess of $50,000 shall be entered or filed against
Borrower or any of its Subsidiaries or any of their respective assets, and
such money judgment, writ or warrant of attachment or similar process is
not dismissed within 15 days of its grant; (l) this Loan Agreement or any
Other Agreement shall for any reason fail or cease to be valid and binding
on, or enforceable against, Borrower or any other party thereto or
Borrower shall so assert; (m) this Loan Agreement or any Other Agreement
shall for any reason cease to be in full force and effect or cease to
create a valid and enforceable lien and security interest on any
Collateral purported to be covered thereby or any such lien and security
interest shall fail or cease to be a perfected and first priority lien and
security interest (subject to Permitted Liens); (n) if Borrower is in
default (i) in the payment of any of Borrower's debt to Lender under any
Other Agreement; or (ii) in the payment of any debt to any Person other
than Lender in excess of $50,000 or, in the case of clause (i) or (ii),
any other event shall occur or condition shall exist under any agreement
or instrument relating to any such debt and such default, condition or
event gives the holders of such debt (or any agent or trustee on their
behalf) the then current right to accelerate such indebtedness, provided
that the foregoing shall not apply to defaults on debt obligations owed by
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the Borrower to radio stations for media purchases and other past due debt
obligations as of the Amendment Closing Date previously disclosed to
Lender in the Weekly Cash Report by the Borrower; (o) [Reserved]; (p)
Borrower changes the nature of its business such that it ceases to
generate a majority of its revenue from the business of providing an
electronic exchange or forum for selling and purchasing advertising media
and ancillary applications that use the same platform; (q) if two or more
of Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxx and Xxxxxxx Xxxxxx ("Senior
Executives") cease to be employed by Borrower in any 90 day period and
each departed Senior Executive is not replaced within 90 days of such
Senior Executive's departure with an executive having comparable
experience (in the reasonable discretion of Borrower's Board of
Directors); provided that a senior management change shall not be deemed
to have occurred if the title and/or responsibilities of such Senior
Executive changes, if such Senior Executive continues to provide
substantial and regular services to Borrower; (r) a Material Investor
Event occurs; (s) Borrower becomes engaged in litigation or regulatory
proceedings which has had or would likely have a Material Adverse Effect;
or (t) a Material Adverse Effect upon the Intellectual Property of
Borrower occurs. Borrower shall provide written notice of any events or
circumstances which would give rise to an Event of Default under this
Section 8.1 promptly (but in no event more than one (1) Business Day)
after becoming aware of such events or circumstances. Failure of Borrower
to give such notice promptly shall constitute an Event of Default
hereunder."
(p) NOTES. The existing promissory notes evidencing the Term
Loan and the Revolving Loan are hereby amended and restated in their entirety in
the forms attached hereto as Exhibit A and Exhibit B, respectively (the "Amended
Notes").
4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS Amendment. The
effectiveness of the provisions of Sections 2 and 3 of this Amendment is
conditioned upon, and such provisions shall not be effective until, satisfaction
of the following conditions (the first date on which all of the following
conditions have been satisfied being referred to herein as the "Amendment
Effective Date"):
(a) The Lender shall have received this Amendment, duly
executed and delivered by each Borrower.
(b) The Lender shall have received a certificate of an
authorized officer of each Borrower, dated as of the date of this Amendment,
certifying that attached thereto are true and correct copies of resolutions duly
adopted by the board of directors or other governing body of such Borrower and
continuing in effect, which authorize the execution, delivery and performance by
such Borrowers of this Amendment and the consummation of the transactions
contemplated hereby.
(c) The representations and warranties set forth in this
Amendment shall be true and correct as of the Amendment Effective Date.
(d) The Lender shall have received from Borrower a notice of
borrowing of a Revolving Advance in an amount not less than $750,000, which
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advance shall occur on the Amendment Effective Date and shall be reduced by (i)
a documentation fee in the amount of $50,000, as provided in Section 6(b) below,
(ii) service and late fees and (iii) the principal and interest payments that
were due on August 1, 2007 and September 1, 2007 under the Existing Credit
Agreement and the interest payment that is due on the Amendment Closing Date
under the Credit Agreement.
(e) The Lender shall have received from Borrower the Amended
Notes and the amended Warrant.
(f) The Lender shall have received from Borrower a new Warrant
in the form attached hereto as Exhibit C (the "Additional Warrant").
5. REPRESENTATIONS AND WARRANTIES. In order to induce the Lender to
enter into this Amendment and to amend the Existing Credit Agreement and the
Other Agreements in the manner provided in this Amendment, each Borrower
represents and warrants to the Lender as follows:
(a) AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment, the Amended Notes and the Additional Warrant by such Borrower
and the performance by such Borrower of the Existing Credit Agreement and the
Other Agreements, each as amended by this Amendment (hereafter referred to as
the "Amended Credit Documents") (i) are within the power of such Borrower and
(ii) have been duly authorized by all necessary actions on the part of such
Borrower.
(b) ENFORCEABILITY. Each of this Amendment, the Amended Notes
and the Additional Warrant and the Amended Credit Documents has been duly
executed and delivered by such Borrower and constitutes a legal, valid and
binding obligation of such Borrower, enforceable against such Borrower in
accordance with its terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(c) NON-CONTRAVENTION. The execution and delivery by such
Borrower of this Amendment, the Amended Notes and the Additional Warrant and the
performance by such Borrower of each of this Amendment and the Amended Credit
Documents do not (i) violate any provision of any existing law, rule,
regulation, order, writ, injunction or decree of any court or governmental
authority to which it is subject; (ii) violate any provision of, or result in
the breach or the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both), any contractual
obligation of any Borrower; or (iii) result in the creation or imposition of any
lien (or the obligation to create or impose any lien) upon any property, asset
or revenue of any Borrower (except for Permitted Liens).
(d) GOVERNMENTAL CONSENTS. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
such Borrower of this Amendment, the Amended Notes or the Additional Warrant.
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(e) REPRESENTATIONS AND WARRANTIES IN THE CREDIT Agreement.
Such Borrower confirms that as of the Amendment Effective Date and after giving
effect to this Amendment, (i) the representations and warranties contained in
Section 6 of the Credit Agreement are true and correct in all material respects
(except to the extent any such representation and warranty is expressly stated
to have been made as of a specific date, in which case it shall be true and
correct as of such specific date) and (ii) no Default has occurred and is
continuing, except as set forth in Section 2 above.
6. MISCELLANEOUS.
(a) REFERENCE TO AND EFFECT ON THE EXISTING CREDIT AGREEMENT
AND THE OTHER AGREEMENTS.
(i) Except as specifically amended by this
Amendment and the documents executed and delivered in connection herewith, the
Existing Credit Agreement and the Other Agreements shall remain in full force
and effect and are hereby ratified and confirmed by the Borrower in all
respects.
(ii) The execution and delivery of this Amendment
and performance of the Amended Credit Documents shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of the Lender under, the Existing Credit Agreement
or any of the Other Agreements.
(iii) Upon the conditions precedent set forth herein
being satisfied, this Amendment shall be construed as one with the Existing
Credit Agreement, and the Existing Credit Agreement shall, where the context
requires, be read and construed throughout so as to incorporate this Amendment.
(iv) If there is any conflict between the terms and
provisions of this Amendment and the terms and provisions of the Credit
Agreement or any Other Agreement, the terms and provisions of this Amendment
shall govern.
(b) COSTS AND EXPENSES. Borrower absolutely and
unconditionally agrees to pay to Lender, on demand by Lender at any time and as
often as the occasion therefor may require, whether or not all or any of the
transactions contemplated by this Amendment are consummated: (i) up to $50,000
in fees and disbursements of any counsel to Lender in connection with the
preparation, negotiation, execution, or delivery of this Amendment and any
agreements delivered in connection with the transactions contemplated hereby,
(ii) all fees and disbursements of any counsel to Lender in connection with any
new financing by or restructuring of Borrower within 30 days of the Amendment
Effective Date and (iii) expenses which shall at any time be incurred or
sustained by Lender or any participant of Lender or any of their respective
directors, officers, employees or agents as a consequence of or in any way in
connection with the preparation, negotiation, execution, or delivery of this
Amendment and any agreements prepared, negotiated, executed or delivered in
connection with the transactions contemplated hereby.
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(c) HEADINGS. Section and subsection headings in this
Amendment are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
(d) COUNTERPARTS. This Amendment may be executed in any number
of identical counterparts, any set of which signed by all the parties hereto
shall be deemed to constitute a complete, executed original for all purposes.
Transmission by telecopier (or by email of a PDF or similar electronic image
file) of an executed counterpart of this Amendment shall be deemed to constitute
due and sufficient delivery of such counterpart.
(e) GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York without reference
to conflicts of law rules other than Section 5-1401 of the General Obligations
Law of the State of New York.
(f) WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AMENDMENT, WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE.
(g) RELEASE.
(i) In consideration of the agreements of Lender
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Borrower, on behalf of itself
and its successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably releases, remises and forever discharges Lender
and its successors and assigns, and its present and former shareholders,
affiliates, subsidiaries, divisions, predecessors, directors, officers,
attorneys, employees, agents and other representatives (Lender and all such
other Persons being hereinafter referred to collectively as the "Releasees" and
individually as a "Releasee"), of and from all demands, actions, causes of
action, suits, covenants, contracts, controversies, agreements, promises, sums
of money, accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set-off, demands and liabilities whatsoever
(individually, a "Claim" and collectively, "Claims") of every name and nature,
known or unknown, suspected or unsuspected, both at law and in equity, which
Borrower or any of its successors, assigns, or other legal representatives may
now or hereafter own, hold, have or claim to have against the Releasees or any
of them for, upon, or by reason of any circumstance, action, cause or thing
whatsoever which arises at any time on or prior to the day and date of this
Amendment, including for or on account of, or in relation to, or in any way in
connection with any of the Credit Agreement, or any of the Other Agreements or
transactions thereunder or related thereto.
(ii) Each Borrower understands, acknowledges and
agrees that the release set forth above may be pleaded as a full and complete
defense and may be used as a basis for an injunction against any action, suit or
other proceeding which may be instituted, prosecuted or attempted in breach of
the provisions of such release.
(h) COVENANT NOT TO XXX. Each Borrower, on behalf of itself
and its successors, assigns, and other legal representatives, hereby absolutely,
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unconditionally and irrevocably, covenants and agrees with and in favor of each
Releasee that it will not xxx (at law, in equity, in any regulatory proceeding
or otherwise) any Releasee on the basis of any Claim released, remised and
discharged by Borrower pursuant to Section 6(f) hereof. If either Borrower or
any of its successors, assigns or other legal representations violates the
foregoing covenant, each Borrower, for itself and its successors, assigns and
legal representatives, agrees to pay, in addition to such other damages as any
Releasee may sustain as a result of such violation, all attorneys' fees and
costs incurred by any Releasee as a result of such violation.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
BORROWER:
SWMX, INC.,
A DELAWARE CORPORATION
By: /s/ Xxxxx Xxxx
----------------------------------------
Name: Xxxxx Xxxx
--------------------------------------
Title: Chief Financial Officer
--------------------------------------
SOFTWAVE MEDIA EXCHANGE, INC.,
A DELAWARE CORPORATION
By: /s/ Xxxxx Xxxx
----------------------------------------
Name: Xxxxx Xxxx
--------------------------------------
Title: Chief Financial Officer
--------------------------------------
LENDER:
BLUECREST CAPITAL FINANCE, L.P.
A DELAWARE LIMITED PARTNERSHIP
By: BlueCrest Capital Finance GP, LLC
Its: General Partner
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
---------------------------------
Title: Manager
--------------------------------
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO LOAN DOCUMENTS]
