Document:

Exhibit
10.5

 

 

SECURED
PROMISSORY NOTE

 

FOR VALUE
RECEIVED, the undersigned Acceris Communications Inc., a Florida corporation
(“ACI”) and
Acceris Communications Corp., a Delaware corporation (the “Company”) (ACI
and the Company are collectively, the “Makers”) hereby
promise to pay to Acceris Management and Acquisition LLC, a Minnesota limited
liability company (the “Buyer”), or
order, at 60 South Sixth Street, Suite 2535, Minneapolis, Minnesota 55402, or
such other place as the holder of this Note may designate in writing to the
Makers, a principal sum equal to the following: (a) any
advances made by the Buyer to the Company which were made in connection with any
written agreements between the Buyer and the Makers, less the amount of any such
advances already recovered by the Buyer; plus (b) an
amount equal to the net income of the Company from the period beginning on the
date of this Note and ending on the termination date of that certain Asset
Purchase Agreement of even date between the Makers and the Buyer (the
“Purchase
Agreement”);
plus (c) an
amount equal to five percent of the net income of the Company from the period
beginning on the date of this Note and ending on the termination date of the
Purchase Agreement (collectively, the “Principal”). No
interest shall accrue on the Principal under this Note. 

 

The
Principal shall be due and payable to the Buyer or the holder of this Note
in
immediately available funds on the date on which the Purchase Agreement is
terminated other than in accordance with a termination pursuant to Section
10.1(c) of the Purchase Agreement. Notwithstanding the foregoing, if the Closing
of the Purchase Agreement occurs, this Note shall be terminated and the Makers
shall not be obligated to pay any amounts of the Principal
outstanding.

 

This Note
may be fully or partially prepaid at any time without penalty or premium. Any
prepayment shall be applied first to accrued but unpaid interest and the
remainder to principal.

 

Maker
waives presentment, dishonor, protest, demand, diligence, notice of protest,
notice of demand, notice of dishonor, notice of nonpayment, and any other notice
of any kind otherwise required by law in connection with the delivery,
acceptance, performance, default, enforcement or collection of this Note and
expressly agrees that this Note, or any payment hereunder, may be extended or
subordinated (by forbearance or otherwise) at any time, without in any way
affecting the liability of Maker.

 

Maker
agrees to pay on demand all costs of collecting or enforcing payment under this
Note, including attorneys’ fees and legal expenses, whether suit be brought or
not, and whether through courts of original jurisdiction, courts of appellate
jurisdiction, or bankruptcy courts, or through other legal
proceedings.

 

This Note
may not be amended or modified, nor shall any waiver of any provision hereof be
effective, except only by an instrument in writing signed by the party against
whom enforcement of any amendment, modification, or waiver is sought. This Note
shall be governed by and construed according to the laws of the State of
Illinois, without regard to its conflicts of laws principles.

 

The
Makers have
caused this Note to be executed and made effective as of the Execution Date, as
that term is used and defined in the Purchase Agreement.

 

	 	 	 
	 	MAKERS:
	 	 
	 	ACCERIS COMMUNICATIONS INC.
	 
 	 
 	 
 
		By:  	/s/ 
	 	
      

      Name:
	 	Title:

 

		 	 
	 	
      ACCERIS
      COMMUNICATIONS CORP.

	 
 	 
 	 
 
		By:  	/s/ 
	 	
      

      Name:
	 	Title:

 

[Signature
Page to Promissory Note]

 

2Exhibit
10.6

 

IRREVOCABLE
PROXY

 

This
Irrevocable Proxy (this “Proxy”)
between Counsel
Corporation, an Ontario corporation, Counsel Capital Corporation, an Ontario
corporation, Counsel LLC, a Delaware limited liability company, Counsel
Communications, LLC, a Delaware limited liability company, CounselCare Ltd, a
Delaware corporation, Counsel Corporation (US), a Delaware
corporation (collectively,
the “Stockholders”) and
Acceris
Management and Acquisition LLC, a Minnesota limited liability
company (the
“Proxy
Holder”), takes
effect on the Execution Date. Capitalized terms used but not defined in this
Proxy have the meanings ascribed to them in that certain Asset Purchase
Agreement of even date between the Counsel Corporation, the Proxy Holder and
certain other parties (the “Asset
Purchase Agreement”).

 

RECITALS

 

	
      A.
	
      The
      Stockholders beneficially own an aggregate of 17,517,269 shares of the
      common stock (the “Acceris
      Stock”)
      of Acceris Communications Inc., a Florida corporation (the “Company”),
      as described in the Company’s Schedule 13D, Amendment No. 3, filed with
      the United States Securities and Exchange Commission on February 16, 2005
      (the “Schedule
      13D”).

 

	
      B.
	
      In
      order to induce the Proxy Holder to enter into the Asset Purchase
      Agreement, the Stockholders have agreed to appoint the Proxy Holder as
      their proxy to vote all of the Acceris Stock or other equity securities of
      the Company now held or hereafter directly or indirectly acquired by the
      Stockholders (with the Acceris Stock, the “Shares”).
      

 

	
      C.
	
      This
      Proxy is delivered by the Stockholders to the Proxy Holder in satisfaction
      of the terms and conditions of Section 5.16 of the Asset Purchase
      Agreement. 

 

PROXY

 

In
consideration of the above recitals and the promises set forth in this Proxy,
the parties agree as follows:

 

1.    Irrevocable
Proxy.

 

	 	
      1.1
	
      The
      Stockholders hereby irrevocably appoint the Proxy Holder as their true and
      lawful attorney-in-fact and proxy, with full power of substitution for and
      in their name, to vote the Shares and any other capital stock or equity
      securities of the Company hereinafter acquired by the Stockholders, in
      favor of the approval
      of the Asset Purchase Agreement, the Transaction Documents and the
      transactions contemplated by the Asset Purchase Agreement at
      any meetings of the stockholders of the Company (or by written action in
      lieu thereof) where such matters are to be voted upon or
      approved..

 

	 	
      1.2
	
      The
      parties acknowledge and agree that the appointment and proxy granted by
      the Stockholders to the Proxy Holder set forth in this Section 1 is
      irrevocable and, because of the consideration being provided by the Proxy
      Holder, this Proxy is coupled with an interest within the meaning of
      Delaware General Corporation Law Title 8, ch. 1, § 212. This Proxy
      will not terminate by operation of law, or by dissolution, bankruptcy or
      adjudication of incompetence or insanity of the Stockholders or the
      occurrence of any other event except as set forth in this Proxy. By
      executing this Proxy, the Stockholders hereby revoke and terminate any
      proxy previously given with respect to the Shares.

 

 

	 	
      1.3
	
      By
      executing this Proxy, the Stockholders acknowledge and agree that any
      officer or manager of the Proxy Holder may be designated to represent the
      Proxy Holder at any meetings of the stockholders of the Company (or by
      written action in lieu thereof) and at any other time the Shares are
      required to or may be voted or acted upon with respect to the Asset
      Purchase Agreement, the Transaction Documents and the transactions
      contemplated under the Asset Purchase
Agreement.

 

	 	
      1.4
	
      The
      Stockholders will defend and indemnify the Proxy Holder against any and
      all claims of any kind asserted or made against the Proxy Holder relating
      to any and all actions taken by the Proxy Holder with respect to exercise
      of the Proxy, which indemnity obligations shall follow the terms of and be
      governed by the language of Section 7 of the Asset Purchase Agreement with
      regard to the indemnity obligations of the Seller Indemnitors, with the
      term Seller Indemnitors being replaced with the term Stockholders under
      this Proxy for purposes of the indemnification of the Proxy
      Holder.

 

	2.    	
      Term.
      This Proxy and the appointment specified herein will terminate on the
      earlier of (a) the date on which the Asset Purchase Agreement is
      terminated, in accordance with the terms and conditions of the Asset
      Purchase Agreement or otherwise, or (b) the
Closing.

 

	3.    	
      Representation
      and Warranty.
      The Stockholders jointly and severally represent and warrant to the Proxy
      Holder that (a) they have full power and authority to enter into this
      Proxy and to revoke and terminate any previously granted proxies with
      respect to the Shares without the need to give notice to, make any filing
      with, or obtain the authorization, consent, or approval of any
      governmental authority or other person in order to grant this Proxy, and
      (b) as of the Execution Date, the Stockholders hold the Acceris Stock in
      the manner and amounts set forth on the Schedule
13D.

 

	4.    	
      Recapitalization.
      This Proxy is intended to apply to all of the capital stock and other
      equity securities of the Company now or hereafter held by the
      Stockholders, including without limitation any shares issued upon any
      reorganization of the Company or any split, exchange or other change in
      the capitalization of the Company.

 

	5.    	
      Benefit
      and Burden.
      This Proxy will inure to the benefit of, and will be binding upon the
      parties hereto and their respective legatees, distributees, estates,
      executors, administrators, personal representatives and legal
      representatives.

 

	6.    	
      Modifications.
      Neither this Proxy, nor any provision hereof, may be modified, waived,
      discharged or terminated orally, but only by an instrument in writing
      executed by the parties hereto.

 

2

 

	7.    	
      Applicable
      Law.
      This Proxy will be construed and enforced in accordance with the laws of
      the State of Delaware, without regard to conflict of law
      principles.

 

	8.    	
      Proxy
      Binding Upon Transferees.
      In the event that at any time or from time to time any of the Shares are
      transferred to any party, the transferee will take the Shares pursuant to
      all provisions, conditions and covenants of this Proxy, and, as a
      condition precedent to the transfer of such Shares, the transferee will
      agree as a condition to such transfer (for and on behalf of himself,
      herself or itself, his, her or its legal and personal representatives and
      his, her or its transferees and assigns) in writing to be bound by all
      provisions of this Proxy.

 

	9.    	
      Construction.
      This Proxy is solely intended to be an irrevocable proxy and is not
      intended to be or construed as a voting trust, voting agreement or pooling
      agreement.

 

[REMAINDER
OF THIS PAGE LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

3

The
Stockholders have executed this Proxy to be made effective as of the Execution
Date (as defined in the Asset Purchase Agreement). 

 

	STOCKHOLDERS:	 	 	 
	 	 	 	 
	COUNSEL CORPORATION	 	 	COUNSEL COMMUNICATIONS, LLC
	 	 	 	 
	 	 	 	 
	/s/ 	 	 	/s/ 
	
      

      By:	 	 	
      

      By:
	Its:	 	 	Its:

 

	 	 	 	 
	COUNSEL CAPITAL CORPORATION	 	 	COUNSELCARE
      LTD
	 	 	 	 
	 	 	 	 
	/s/ 	 	 	/s/ 
	
      

      By:	 	 	
      

      By:
	Its:	 	 	Its:

 

		 	 	
       

	COUNSEL LLC	 	 	
      COUNSEL
      CORPORATION (US)

	 	 	 	 
	 	 	 	 
	/s/ 	 	 	/s/ 
	
      

      By:	 	 	
      

      By:
	Its:	 	 	Its:

 

		 	 	PROXY HOLDER:
	 	 	 	 
		 	 	
      ACCERIS MANAGEMENT AND ACQUISITION
      LLC

	 	 	 	 
	 	 	 	 
		 	 	/s/ 
		 	 	
      

      By: 
      Elam Baer
		 	 	Its:  Chief
      Executive Officer

 

 

[Signature
Page to Irrevocable Proxy]

 

4

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