Document:

AMENDMENT TO PROMISSORY NOTE

Exhibit

4.39

AMENDMENT

TO PROMISSORY NOTE

 

 

This AMENDMENT TO

PROMISSORY NOTE (the “Second Amendment”) is made this       day of April 2002, between EpicEdge,

Inc., a Texas corporation (“Maker”), and Carl R. Rose (“Payee”).

 

PREAMBLE

 

WHEREAS,

Maker executed a Convertible Note on the 1st day of November,

2000 whereby it promised to pay to the order to Payee the sum of $500,000, (the

“Original Note”);

 

WHEREAS,

the Original Note was previously amended on the 31st day of

August, 2001 (the “First Amendment”); and

 

WHEREAS,

Maker and Payee have mutually agreed to amend the payment

terms of the Original Note.

 

NOW,

THEREFORE, in exchange for the mutual promises contained

herein, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto agree to further amend the

Original Note as follows:

 

1.               Section (b) of

introductory paragraph of the Original Note shall be amended to reflect that

the principal shall mature on December 1, 2004.  Any previous amendments to this provision are superceded hereby.

 

2.               Section 2 of

the Original Note shall be amended to increase the cure period upon written

notice of an event of default from ten (10) days to twenty (20) days.  Any previous amendments to this provision

are superceded hereby.

 

3.               Section 3(a) of the

Original Note shall be amended to decrease the conversion rate from fifty cents

($0.50) to twenty-five cents ($0.25). 

Any previous amendments to this provision are superceded hereby;

 

4.               Except as provided

by the First Amendment and the Second Amendment, all other terms of the

Original Note shall remain unmodified.

 

[Signature Page Follows]

 

 

IN

WITNESS WHEREOF, each of the parties hereto has executed this

Second Amendment or has caused this Second Amendment to be executed on its

behalf by a representative duly authorized, all as of the date first above set

forth.

 

MAKER:

 

	

  EPICEDGE, INC.

  	

   

  
	

   

  	

   

  
	

  By: 

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  PAYEE:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  CARL R. ROSE

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  JENTA ROSE

  	

   

  
					

 

 

AMENDMENT

TO PROMISSORY NOTE

 

 

This AMENDMENT TO

PROMISSORY NOTE (the “Second Amendment”) is made this      day of April 2002, between EpicEdge,

Inc., a Texas corporation (“Maker”), and Carl R. Rose (“Payee”).

 

PREAMBLE

 

WHEREAS,

Maker executed a Convertible Note on the 7th day of November,

2000 whereby it promised to pay to the order to Payee the sum of $400,000, (the

“Original Note”);

 

WHEREAS,

the Original Note was previously amended on the 31st day of

August, 2001 (the “First Amendment”); and

 

WHEREAS,

Maker and Payee have mutually agreed to amend the payment

terms of the Original Note.

 

NOW,

THEREFORE, in exchange for the mutual promises contained

herein, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto agree to further amend the

Original Note as follows:

 

5.               Section (b) of

introductory paragraph of the Original Note shall be amended to reflect that

the principal shall mature on December 1, 2004.  Any previous amendments to this provision are superceded hereby.

 

6.               Section 2 of

the Original Note shall be amended to increase the cure period upon written

notice of an event of default from ten (10) days to twenty (20) days.  Any previous amendments to this provision

are superceded hereby.

 

7.               Section 3(a) of the

Original Note shall be amended to decrease the conversion rate from fifty cents

($0.50) to twenty-five cents ($0.25). 

Any previous amendments to this provision are superceded hereby;

 

8.               Except as provided

by this Second Amendment and the First Amendment, all other terms of the

Original Note shall remain unmodified.

 

 

{Signature Page Follows}

 

 

IN

WITNESS WHEREOF, each of the parties hereto has executed this

Second Amendment or has caused this Second Amendment to be executed on its

behalf by a representative duly authorized, all as of the date first above set

forth.

 

MAKER:

 

	

  EPICEDGE, INC.

  	

   

  
	

   

  	

   

  
	

  By: 

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  PAYEE:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  CARL R. ROSE

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  JENTA ROSEEdgewater/Epic - Voting Agreement (2/02)

EXHIBIT 4.40

 

EPICEDGE, INC.

 

VOTING AGREEMENT

 

THIS VOTING

AGREEMENT (this “Agreement”) is entered into as of April       , 2002, by and among Carl Rose (“Rose”);

Jenta Rose (“Mrs. Rose”); Charles Leaver (“Leaver”); Kelly Knake

(“Knake”); Gerald Allen (“Allen”); John Paul DeJoria (“DeJoria”);

Edgewater Private Equity Fund III, L.P., a Delaware limited partnership (“Edgewater”);

and Fleck T.I.M.E. Fund, LP, a Connecticut limited partnership (“TIME”),

each in his, her or its capacity as a shareholder of EPICEDGE, INC., a Texas

corporation (the “Company”). 

Edgewater, Rose, Mrs. Rose, Leaver, Knake, Allen, DeJoria, and TIME

shall be referred to herein individually from time to time as a “Shareholder”

and collectively as the “Shareholders”.

 

W  I  T  N

E  S  S  E  T  H:

 

WHEREAS,

certain of the Shareholders own or will own (pursuant to the terms of the

Purchase Agreement) (a) shares of Common Stock, $0.01 par value, of the Company

(the “Common Stock”), (b) shares of Series A Convertible Preferred

Stock, $0.01 par value, of the Company (the “Series A Stock”), and (c)

shares of Series B Convertible Preferred Stock, $0.01 par value, of the

Company (the “Series B Stock”; and, together with the Series A Stock,

the “Preferred Stock”).  The

Common Stock and the Preferred Stock shall be referred to herein collectively

as the “Company Stock”;

 

WHEREAS,

pursuant to the terms of that certain Note and Preferred Stock Purchase

Agreement of even date herewith (the “Purchase Agreement”),

(a) certain of the parties hereto have made certain loans to the Company,

which indebtedness is convertible into shares of Series B Stock and

(b) Edgewater and TIME have agreed to convert certain outstanding debt

owed by the Company to such parties into shares of Series A Stock; and

 

WHEREAS, the

parties hereto consider it to be in the best interests of the Shareholders to

enter into this Agreement on the terms provided herein.

 

NOW,

THEREFORE, in consideration of the mutual promises, covenants and conditions

herein contained, and for other good and valuable consideration, the receipt

and sufficiency of which is hereby acknowledged, the parties hereto covenant

and agree as follows:

 

ARTICLE 1

 

VOTING,

MANAGEMENT, ETC.

 

1.1           Voting.  The Company’s Articles of Incorporation, as

may be amended from time to time (the “Articles”), provide that (a) the

Common Stock shall entitle the holders thereof to one (1) vote per share on

each proposition submitted to shareholders of the Company for their vote

thereon, and (b) the Preferred Stock shall entitle the holders thereof to the

number of votes 

 

1

 

equal to the number of votes

possessed by the number of shares of Common Stock into which such shares of

Preferred Stock are convertible as of the record date of any such vote.

 

1.2           Control

Agreements.  Each Shareholder agrees

to (a) vote his or its shares of Company Stock, and (b) take all actions within

his or its authority necessary for the Company to comply with the provisions of

Section 1.2(a)(i) hereof and Sections 6.1(i), 6.7 and

6.8 of the Purchase Agreement including, without limitation, voting his

or its respective shares in favor of any amendment to the Articles or By-Laws

of the Company, if such action is required, so as to provide for all the events

described in Section 1.2(a)(i)  hereof

and Sections 6.1(i), 6.7 and 6.8 of the Purchase

Agreement.

 

(a)           Directors.

 

(i)            Designation

of Directors.  Eight  (8) directors shall be elected to the

Company’s Board of Directors (the “Board”) as follows:

 

(A)          two

(2) of whom shall be designated in accordance with Section 1.2(a) of that

certain Amended and Restated Shareholders’ Agreement dated July 21, 2000, by

and among the Company and certain parties named therein (the “July

Representatives”);

 

(B)           one

(1) of whom shall be designated by Edgewater (the “Series B Representative”);

 

(C)           one

(1) of whom shall be the current Chief Executive Officer of the Company (the “CEO”);

 

(D)          one

(1) of whom shall be designated by the CEO; and

 

(E)           three

(3) of whom shall be independent outsiders whom shall be designated by mutual

agreement of the July Representatives, the Series B Representative and the CEO.

 

In accordance

with Section 1.2(a)(i)(A) above, the parties hereto agree that each of

Edgewater and TIME shall designate one (1) of the July Representatives.

 

ARTICLE 2

 

MISCELLANEOUS

 

2.1           Amendments;

Waiver.  This Agreement may be

amended, restated or modified only in a writing which is executed by the

holders of a majority of the Convertible Debt and the outstanding principal

amount of the Notes (as such terms are defined in the Purchase Agreement)

voting as a single class (or, if such Convertible Debt and Notes have been

converted into Series A Stock and Series B Stock, as applicable, in accordance

with the terms of the Purchase Agreement, the holders of a majority of the

Series A Stock (or the Common Stock into which 

 

2

 

such securities are

convertible) and the holders of a majority of the Series B Stock (or the Common

Stock into which such securities are convertible) voting as a single class).

 

2.2           Binding Effect.  It is expressly agreed and understood that

this Agreement is not to be deemed strictly personal to the parties hereunder,

but this Agreement shall also inure to the benefit of and be binding not only

upon the said parties hereto but also upon their respective heirs, executors,

administrators, personal and legal representatives, successors and assigns, and

all parties hereto agree for themselves and for their said heirs, executors, administrators,

personal and legal representatives, successors and assigns to be bound by all

of the provisions hereof and to execute at any time any documents or

instruments which may be necessary or proper to carry out the purpose and

intent of this Agreement.

 

2.3           Governing Law.  The internal law of the State of Illinois

will govern all questions concerning the construction, validity and

interpretation of this Agreement, notwithstanding the fact that one or more of

the parties now is or may become a resident of or domiciled in a different

state.

 

2.4           Counterparts and

Gender References.  This Agreement

may be executed in several counterparts (including by means of separate

signature pages, which may be attached hereto) by one or more of the parties,

each of which shall be deemed an original, and all of said counterparts (and

signature pages) shall be deemed to constitute or be part of one and the same

instrument.  One or more counterparts of

this Agreement may be delivered by facsimile, with the intention that delivery

by such means shall have the same effect as delivery of an original counterpart

thereof.  All gender references shall be

deemed modified to fit the context.

 

2.5           Severability.  Should any particular provision of this

Agreement be adjudicated to be invalid or unenforceable such provision shall be

deemed deleted and the remainder of the Agreement shall, nevertheless, remain

unaffected and fully enforceable; further, to the extent any provision herewith

is deemed unenforceable by virtue of its scope but may be made enforceable by

limitation thereof, the parties hereto agree the same shall, nevertheless, be

enforceable to the fullest extent permissible under the laws and public

policies applied in the jurisdiction in which enforcement or interpretation is

sought.

 

2.6           Further

Assurances.  Upon the request of any

party hereto, all parties hereto agree to promptly execute and deliver all such

other instruments and take all such other actions in order to effectuate and

carry out the purposes, privileges, restrictions, rights and duties of the

parties and other provisions of this Agreement.

 

2.7           No Waiver,

Remedies Cumulative.  No delay on

the part of any party in exercising 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 hereunder preclude other or further

exercise thereof, or the exercise of any other right, power or privilege.  Without limiting the generality of the

foregoing, nothing in this Agreement shall be deemed to preclude or be in lieu

of any right or remedy that any party may have at law or in equity or by

statute or otherwise against any other person based upon any fraud (whether or

not the matter to which the fraud related also constitutes a default

hereunder).

 

3

 

2.8           Headings;

Exhibits.  The headings or other

subdivisions in this Agreement are intended solely for convenience or reference

and shall be given no effect in the construction or interpretation of this

Agreement.  All Exhibits attached hereto

are deemed incorporated herein by reference.

 

2.9           Specific

Performance.  The parties hereby

declare that it is impossible to measure in money the damages which will accrue

to a party hereto by reason of a failure to perform any of the obligations

under this Agreement and that a breach hereof shall cause irreparable injury

and, in addition to any other right or remedy available to the parties hereto

at law or in equity, any injured party hereunder shall be entitled to

enforcement by court injunction or specific performance of the obligations of

the Shareholders hereunder, without the necessity for posting a bond.  Notwithstanding the foregoing sentence,

nothing herein shall be construed as prohibiting any injured party hereunder

from also pursuing any other rights or remedies for such breach or threatened

breach, including receiving damages and attorneys’ fees.  The election of any remedy shall not be construed

as a waiver on the part of any injured party hereunder of any rights such party

might otherwise have at law or in equity, which rights and remedies shall be

cumulative.

 

2.10         Termination.  This Agreement shall terminate and be of no

further force and effect upon the consummation of a Liquidity Event; provided,

however, the transactions contemplated hereby and by the Purchase Agreement

shall not be deemed a Liquidity Event. 

For the purposes hereof, the term Liquidity Event shall mean (a) a

sale or transfer of more than fifty percent (50%) of the assets of the Company

in any transaction or series of related transactions (other than sales in the

ordinary course of business), (b) any merger, consolidation or

reorganization to which the Company is a party, except for a merger, consolidation

or reorganization in which the Company is the surviving Company and, after

giving effect to such merger, consolidation or reorganization, the holders of

the Company’s outstanding capital stock (on a fully-diluted basis) immediately

prior to the merger, consolidation or reorganization will own, immediately

following the merger, consolidation or reorganization, capital stock holding a

majority of the voting power of the Company, (c) any sale or series of

sales of shares of the Company’s capital stock by the holders thereof which

results in any person or entity or group of affiliated persons or entities

(other than the owners of the Company’s capital stock as of the date of hereof)

owning capital stock holding a majority of the voting power of the Company or

(d) any liquidation, dissolution or winding up of the Company.

 

2.11         Notices.  Any and all notices or other communications

required or permitted to be delivered hereunder shall be deemed properly

delivered if (a) delivered personally, (b) mailed by first class,

registered or certified mail, return receipt requested, postage prepaid,

(c) sent by next-day or overnight mail or delivery or (d) sent by

telecopy or telegram, to the parties as set forth in Section 9.3 of the

Purchase Agreement.

 

2.12         Securities

Filings.  Upon the request of

Edgewater or the Company, each of the parties hereto agrees to cooperate, to

promptly execute and deliver all such filings, forms and documents and take all

such other actions necessary to comply with the requirements of the Securities

and Exchange Act of 1934, as amended, including, without limitation, filing a

joint Form 13D or 13G with the other parties hereto.

 

4

 

2.13         Proxy Delivery.  In connection with the agreements made

pursuant to Section 1.2 of this Agreement, each of Rose, Mrs. Rose,

Leaver, Knake, Allen, and DeJoria (collectively, the “Proxy Shareholders”),

shall execute and deliver to Edgewater on the date of this Agreement an

irrevocable proxy, in the form attached hereto as Exhibit A, which proxy

(a) shall authorize Edgewater to vote all of such party’s shares of Company

Stock in favor of the events and transactions referenced in Section 1.2

hereof, and (b) is coupled with an interest as it includes the appointment as

proxy of a party to this Agreement.

 

2.14         Restrictions on

Transfer.  Each of the Proxy

Shareholders hereby agrees not to Transfer (as defined below) any shares of the

Company Stock that he or she holds until after the consummation of the Equity

Closing (as defined in the Purchase Agreement).  For purposes hereof the term “Transfer” shall mean a sale,

transfer, or any other act whereby a Proxy Shareholder’s rights of ownership

are sold, transferred, disposed of, pledged, hypothecated, encumbered, or in

any way impaired or affected.

 

[SIGNATURE PAGE

FOLLOWS]

 

5

 

Voting Agreement

Signature Page

 

IN WITNESS

WHEREOF, each of the Shareholders have signed this Voting Agreement, all on the

day and year first above written.

 

	

   

  	

   

  	

  Carl Rose

  
	

   

  	

   

  	

   

  
	

  EDGEWATER

  PRIVATE EQUITY FUND

  III, L.P ., a Delaware limited partnership

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  Edgewater

  III Management, L.P.

  	

   

  
	

  Its:

  	

  General

  Partner

  	

  John Paul

  DeJoria

  
	

   

  	

   

  	

   

  
	

  By:

  	

  Gordon

  Management, Inc.

  	

   

  	

   

  
	

  Its:

  	

  General

  Partner

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

  Its:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Jenta Rose

  
	

   

  	

   

  	

   

  
	

  FLECK

  T.I.M.E. FUND, LP, a Connecticut

  limited partnership

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  Kelly Knake

  
	

  Its:

  	

  Managing Partner

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Charles

  Leaver

  	

  Gerald Allen

  
	

   

  	

   

  	

   

  
								

 

 

EXHIBIT A

 

Form of Irrevocable Proxy

 

See Attached.

 

 

EPICEDGE, INC.

IRREVOCABLE PROXY

 

1.             The undersigned

shareholder of EpicEdge, Inc., a Texas corporation (the “Company”),

hereby constitutes and appoints Edgewater Private Equity Fund III, L.P., a

Delaware limited partnership (“Edgewater”), as true and lawful proxy and

attorney of the undersigned, with full power of substitution, to vote all of

the shares of capital stock of the Company now owned or hereafter acquired by

the undersigned (the “Stock”), at any and all meetings of the

shareholders of the Company, whether these are annual meetings or special

meetings, and any adjournment thereof, or through a written consent of

shareholders in lieu of a meeting, so long as this Irrevocable Proxy remains in

full force and effect, as fully as the undersigned might or could do under any

applicable laws or regulations governing the rights and powers of shareholders

of a Texas corporation, with respect to the following events or actions:

 

(a)           electing the Board

of Directors of the Company in accordance with Section 1.2 of that certain

Voting Agreement dated as of April      

, 2002, between the undersigned and certain other parties named therein

(the “Voting Agreement”), and the continued compliance with the

provisions of Section 1.2 of the Voting Agreement;

 

(b)           approving an

amendment or amendment and restatement of the Articles of Incorporation of the

Company providing for (i) an increase of the number of shares of common

stock, $0.01 par value, of the Company authorized to be issued from 50,000,000

shares to 100,000,000, (ii) the authorization of 10,000,000 shares of

Series A Convertible Preferred Stock, $0.01 par value, of the Company (the “Series

A Stock”) and 10,000,000 shares of Series B Convertible Preferred Stock,

$0.01 par value, of the Company (the “Series B Stock”), and (iii) the rights,

preferences and privileges of the Series A Stock and the Series B Stock; and

 

(c)           all other matters

related to the transactions contemplated by the Purchase Agreement for which

shareholder approval is required.

 

In each case, upon such terms

as Edgewater deems advisable.  The

enumeration herein of said particular powers shall not be construed to limit or

exclude any powers which Edgewater would otherwise have hereunder or be

entitled to exercise as the absolute owners of the Stock.

 

2.             It is not intended

by this Irrevocable Proxy that Edgewater shall assume any liability as a

shareholder of the Company, its interest hereunder being merely that of a

proxy.  In voting the shares of Stock,

Edgewater shall exercise its best judgment from time to time to the end that,

in the judgment of Edgewater, the affairs of the Company shall be properly

managed and the interests of its shareholders safeguarded, and in voting and

acting on such matters, whether at shareholders’ meetings or otherwise, will

likewise exercise its best judgment, but it assumes no responsibility in

respect of such management, or in respect of any action taken by it hereunder,

or by directors of said Company elected by it, or taken in pursuance of its

consent thereto, and Edgewater shall not incur any responsibility or liability

by reason of any error of law or of any matter or thing done or suffered or

omitted to be done under this Irrevocable Proxy.

 

 

3.             This Irrevocable

Proxy supplements, but does not supercede, the provisions of Section 1.2 of the

Voting Agreement, and is given pursuant to the Voting Agreement and other good

and valuable consideration, the receipt and sufficiency of which is hereby

acknowledged.  Accordingly, this

Irrevocable Proxy is coupled with an interest and all authority conferred

hereby shall be irrevocable and shall not be terminated by the undersigned or

by operation of law.

 

4.             All authority

conferred to or agreed to be conferred in this Irrevocable Proxy shall be

binding upon the successors, assigns, heirs, executors, administrators and

legal representatives of the undersigned and shall not be affected by, and

shall survive, the death, incapacity, liquidation or dissolution of the

undersigned or the occurrence of any other event, as the case may be.

 

5.             If the undersigned

should die, become incapacitated, liquidate or dissolve or any other event

shall occur before the termination of this Irrevocable Proxy by its term, any

action taken by Edgewater pursuant to this Irrevocable Proxy shall be as valid

as if such death, incapacity, liquidation, dissolution or other event had not

occurred, regardless of whether or not Edgewater shall have received notice of

such death, incapacity, liquidation, dissolution or other event.

 

6.             This Irrevocable

Proxy shall be irrevocable from the date hereof until the termination of the

Voting Agreement.  This Irrevocable

Proxy shall be governed by the laws of the State of Texas.

 

2

 

7.             THIS

IRREVOCABLE PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE AGAINST ANY DONEE, TRANSFEREE OR

ASSIGNEE OF THE STOCK.

 

Dated this             day of

April, 2002.

 

	

  PLEASE SIGN EXACTLY AS NAME APPEARS

  ON THE CORPORATION RECORD BOOKS.

  WHEN CORPORATION INTERESTS ARE HELD

  BY JOINT TENANTS, BOTH SHOULD SIGN.

  WHEN SIGNING AS ATTORNEY, EXECUTOR,

  ADMINISTRATOR, TRUSTEE OR GUARDIAN,

  PLEASE GIVE FULL TITLE AS SUCH.  IF AN

  ENTITY, PLEASE SIGN IN THE NAME OF

  SUCH ENTITY BY AN AUTHORIZED OFFICER,

  PARTNER OR MEMBER.

  	

   

  
	

  Print Name

  
	

   

  
	

   

  
	

  Signature

  
	

   

  
	

   

  
	

  Signature if held jointly

  
	

   

  
	

  DATED:

  	

   

  
	

   

  

 

3

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