SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | February 10, 2016 |
ONSTREAM MEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Florida
(State or Other Jurisdiction of Incorporation)
| 000-22849 | 65-0420146 |
| (Commission File Number) | (IRS Employer Identification Number) |
1291 SW 29 Avenue, Pompano Beach, Florida 33069
(Address of executive offices and Zip Code)
(954)917-6655
(Registrant's Telephone Number, Including Area Code)
______________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CRF 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 133-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement
As we have previously reported, in December 2007, we entered into a line of credit arrangement (the “Line”) with a financial institution (the “Lender” or “Thermo Credit”), which arrangement has been renewed and modified from time to time, and under which we could borrow up to an aggregate of $2.0 million for working capital, collateralized by our accounts receivable and certain other related assets. Although the Line expired on December 27, 2013, we have continued since that date to negotiate renewal terms with the Lender and to maintain an outstanding borrowing balance under the Line. On February 10, 2016 (the “Effective Date”), we entered into a Loan Modification Agreement (“Modification”) which extended the term of the Line through December 31, 2017 (the “Maturity Date”) and also provides that, if no Default or Event of Default, as defined in the Modification, shall have occurred and be continuing as of the Maturity Date, and upon our notice and request to Lender sent per the timing and other requirements in the Modification, Lender shall (in good faith) engage in, and conclude as quickly as commercially reasonable, negotiations with us to extend the Maturity Date by up to an additional twelve months (i.e., through December 31, 2018). The Modification also changed a number of the other terms of the Line, as discussed below.
The Modification provides that as of the Effective Date the interest rate will be the prime rate plus seven and one-half percent (7.5%) per annum, but no less than eleven percent (11.0%) per annum or any higher rate that might be allowed by the terms of the Line, including the Modification, arising from certain events such as default. The preceding resulted in an interest rate of 11.0% per annum as of the Effective Date, which is one percent per annum less than the interest rate being charged under the Line prior to the Effective Date and after giving effect to the 0.25% increase in the prime rate as of December 17, 2015. The monitoring fee and the commitment fee, as provided for in the Line, were unchanged by the Modification.
The Line is subject to us maintaining an adequate level of receivables, based on certain formulas, as well as our compliance with a quarterly debt service coverage covenant. The Modification made changes to those formulas and to that covenant - we do not expect those changes to have a material adverse impact with respect to our future compliance, although this cannot be assured. The Modification allows our receivable from any single party, including Infinite Conferencing Partners, LLC (“Partners”), to be considered an Eligible Receivable to the extent that (i) the aggregate of all accounts receivable from such party and its affiliates does not exceed thirty percent (30%) of all Eligible Receivables (all Eligible Receivables for this purpose including the portion of the our accounts receivable from such party that is ultimately considered to be an Eligible Receivable) then owed by all of our account debtors and (ii) it meets all of the other requirements for eligibility as set forth in the Line.
As of the Effective Date, the outstanding balance under the Line of approximately $1,650,000 exceeded the maximum allowable borrowing amount under the Line by up to $300,000 (“Allowable Overadvance”). However, the Modification provides that notwithstanding any other provisions of the Line or the Modification, such Allowable Overadvance will not be considered a Default or an Event of Default, and Lender will agree to make advances thereunder based on the Borrowing Base plus the Allowable Overadvance, provided the Allowable Overadvance is reduced to the amounts indicated per the following schedule: February 28 – March 30, 2016 ($275,000); March 31 – April 29, 2016 ($250,000); April 30 –
May 30, 2016 ($200,000); May 31 – June 29, 2016 ($150,000); June 30 – July 30, 2016 ($100,000) and zero as of July 31, 2016 and thereafter.
The terms of the Line, prior to the Modification, required that all funds remitted by our customers in payment of receivables be deposited directly to a bank account owned by the Lender (the “Lockbox Account”). This requirement continues after the Modification - however, the Modification provides that such funds received in the Lockbox Account shall be immediately applied to any balance outstanding under the Line, or returned to us one day following clearance by the receiving bank, to the extent there is no balance outstanding under the Line. The Modification also provides that our failure to comply with these provisions shall be an immediate Event of Default, although our lack of such compliance will not be considered a Default or Event of Default during the first sixty (60) days after the Effective Date, provided that we are making reasonable progress towards such compliance.
The Modification provides that, without limiting any other rights and remedies provided by the terms of the Line or otherwise available to Lender, Lender may exercise one or more of certain rights and remedies, as listed in the Amendment, during the existence of any uncured Default (upon not less than five days prior written notice by Lender) or Event of Default which has not been waived in writing by Lender. Lender’s rights to exercise such rights and remedies will end if and when all of Debtors’ obligations to Lender in connection with the Line have been satisfied. The rights and remedies listed in the Amendment include, but are not limited to: (i) verify the validity and amount of, or any other matter relating to, the accounts by mail, telephone, telegraph or otherwise, (ii) notify all account debtors that the accounts have been assigned to Lender and that Lender has a security interest in the accounts, (iii) direct all account debtors to make payment of all accounts directly to Lender or the Lockbox Account (iv) in any case and for any reason, notify the United States Postal Service to change the addresses for delivery of mail addressed to us to such address as Lender may designate, as well as receive, open and dispose of all such mail, provided that Lender shall promptly forward to us any such items not related to the accounts, (v) exercise all of our rights and remedies with respect to the collection of accounts, (vi) settle, adjust, compromise, extend, renew, discharge or release accounts, for amounts and upon terms which Lender considers advisable and (vii) sell or assign accounts on such terms, for such amounts and at such times as Lender deems advisable.
The Modification provides that we will not declare or pay any dividends or distributions on any equity interest, if before or after such event an Event of Default or Default, as defined in the Modification, would exist.
The above only addresses certain changes in the terms and conditions of the Line and should be read in conjunction with Exhibit 10.1 hereto, which is incorporated herein by reference, as well as with reference to the previous terms and conditions of the Line as set forth in our most recent Form 10-K filed on June 12, 2015 and our most recent Form 10-Q filed on November 25, 2015 and which are also incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this document and elsewhere by Onstream Media are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward- looking statements include, but are not limited to fluctuations in demand; changes to economic growth in the U.S. economy; government policies and regulations, including, but not limited to those affecting the Internet. Onstream Media undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in Onstream Media Corporation's filings with the Securities and Exchange Commission.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
10.1 Loan Modification Agreement with Thermo Credit, LLC dated February 10, 2016
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ONSTREAM MEDIA CORPORATION
By: /s/ Robert E. Tomlinson
February 11, 2016
Robert E. Tomlinson, CFO
EXHIBIT 10.1
LOAN MODIFICATION AGREEMENT
THIS LOAN MODIFICATION AGREEMENT (this “Modification”) dated as of FEBRUARY 10, 2016 (the “Effective Date”), is among THERMO CREDIT, LLC, a Colorado limited liability company (together with its successors and assigns, “Lender”), ONSTREAM MEDIA CORPORATION, a Florida corporation (“OMC”), INFINITE CONFERENCING, INC., a Florida corporation (“ICI”), ENTERTAINMENT DIGITAL NETWORK, INC., a Florida corporation (“EDN”), OSM ACQUISITION, INC., a Delaware corporation (“OSM”), ONSTREAM CONFERENCING CORPORATION, a Florida corporation (“OCC”), AV ACQUISITION, INC., a Florida corporation (“AVA”), AUCTION VIDEO JAPAN, INC., a Japanese corporation (“AVJ”), HOTELVIEW CORPORATION, a Florida corporation (“HC”), and MEDIA ON DEMAND, INC., a Florida corporation (“MDI”) (each of OMC, ICI, EDN, OSM, OCC, AVA, AVJ, HC and MDI may hereinafter be referred to individually as a “Debtor” and all of OMC, ICI, EDN, OSM, OCC, AVA, AVJ, HC and MDI may hereinafter be referred to collectively as the “Debtors”).
RECITALS
WHEREAS, Debtors (other than OCC) and Lender entered into that certain AMENDED AND RESTATED LOAN AGREEMENT dated as of DECEMBER 27, 2011 (as amended, modified, and restated from time to time, including the amendment dated MARCH 9, 2012, the “Agreement”), pursuant to which Lender agreed to make certain credit facilities available to Debtor on the terms and conditions set forth therein.
WHEREAS, OCC and the others Debtors have requested that OCC become a Debtor under the Loan Documents as if an original party thereto; and
WHEREAS, the parties desire to amend the Agreement pursuant to the terms and conditions set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Modification, to the extent not otherwise defined herein, shall have the same meanings as in the Agreement, as amended hereby. In addition, the definition of “Cash Flow” in Section 1 of the Agreement is hereby modified in its entirety to read as follows, and a new definition of “Default” is hereby added to Section 1 of the Agreement in the correct alphabetical order as follows:
“Cash Flow” means, for any period, the sum of net income after taxes, plus depreciation and amortization, plus other non-cash expenses (including non-cash interest expense and non-cash compensation), plus cash interest expense (excluding non-cash interest expense), less cash distributions against any equity interest of Debtor and/or cash dividends paid during such period.
“Default” means any event which with notice and/or the passage of time would be an Event of Default.
2. Extension of Maturity and Renewal Dates. Effective as of DECEMBER 28, 2013, the last sentence of Section 2(c) of the Agreement is deleted and the date “DECEMBER 28, 2013” remaining in Section 2(c) of the Agreement is replaced with the date “DECEMBER 31, 2017,” (the “Extended Maturity Date”). Provided that no Default or Event of Default shall have occurred and be continuing as of the Extended Maturity Date, and upon written request by Debtor (which request shall be made no more than SIXTY (60) days before and not later than FORTY-FIVE (45) days prior to the Extended Maturity Date), Lender shall (in good faith) engage in, and conclude as quickly as commercially reasonable , negotiations with Debtor to extend the Extended Maturity Date (as set forth in this Modification) by up to an additional TWELVE (12) months.
3. Modification of Section 2(d)(i). Certain of the percentages in Section 2(d)(i) of the Agreement are hereby modified as follows:2(d)(i)(1): from 80% to 85%
·
2(d)(i)(1)(b): from 80% to 90%
·
2(d)(i)(1)(c): from 50% to 75%
·
2(d)(i)(2): from 70% to 75%
4. Modification of Sections 2(d)(ii)(12) and (17). Sections 2(d)(ii)(12) and (17) of the Agreement are hereby modified in their entirety to read as follows:
(12)
The account is not owed by an Affiliate, Subsidiary, employee, officer, director or equity holder of such Debtor, other than INFINITE CONFERENCING PARTNERS, LLC.
(17)
The account (or portion thereof) shall be ineligible if and to the extent the aggregate of all accounts owed by the account debtor and its Affiliates to which the account relates, when taken together with such account or portion thereof, exceeds thirty percent (30.00%) of all Eligible Receivables (all Eligible Receivables for this purpose including the portion of the account that is ultimately considered to be an Eligible Receivable) then owed by all of such Debtor’s account debtors;
5. Clarification of Section 2(g)(ii). Lender hereby agrees that Debtors have paid all commitment fees called for by Section 2(g)(ii) of the Agreement through December 31, 2015. Debtors agree to pay an additional commitment fee of $40,000.00 (two percent (2%) of the amount of the Revolving Credit Facility), which commitment fee is deemed earned as of the date of this Modification, but is payable in two equal installments on February 28, 2016 and December 31, 2016, respectively.
6. Modification of Section 2(h). Section 2(h) of the Agreement is hereby modified in its entirety to read as follows (and this modified Section 2(h) shall control in the event of a conflict between this Section 2(h) and any other Loan Document):
(h) Lockbox.
(i) Collections. Except as may otherwise be established by Lender in writing, a lockbox account (the “Lockbox Account” or the “Lender Deposit Account”) will be established or assigned, as the case may be, for the benefit of Lender into which all amounts payable by account debtors to Debtors with respect to accounts receivable (“Collections”) shall be deposited. The Lockbox Account will be maintained at the expense of Debtors. Debtors agree to deposit all Collections they receive with respect to accounts receivable in the Lockbox Account and will instruct each account debtor to make all payments on accounts receivable to said Lockbox Account. All funds in the Lockbox Account will be remitted as instructed by Lender, for immediate application to the Indebtedness, or return to the Debtors one day following clearance by the receiving bank to the extent there is no Indebtedness outstanding. As Collateral for the repayment of the Indebtedness, each Debtor does hereby sell, transfer, assign, set over and convey to, and grants a security interest to Lender in, all right, title and interest of Debtor in and to all amounts deposited, from time to time, in the Lockbox Account. Any Collections relating to accounts receivable held by Debtor pending deposit to the Lockbox Account as provided in this Agreement, shall be held in trust for the benefit of Lender until such amounts are deposited into the Lockbox Account. All Collections in respect of accounts receivable received by any Debtor and not deposited directly by each account debtor shall be remitted to the Lockbox Account no later than the next Business Day following Debtor’s receipt thereof, and if such Collections are not remitted on a timely basis, it shall be an immediate Event of Default hereunder. Any Debtor’s failure to comply with this Section 2(h) shall be an immediate Event of Default hereunder.
Notwithstanding, Lender agrees that Debtor’s lack of compliance with the provisions of the above paragraph will not be considered a Default or Event of Default during the first sixty (60) days after the Effective Date, provided that Debtor is making reasonable progress towards such compliance.
(ii) Receipt of Proceeds. All amounts and proceeds (including instruments and writings) received by any Debtor in respect of the Collateral shall be received in trust for the benefit of Lender hereunder and shall be forthwith delivered to the Lockbox Account in the same form as so received (with any necessary endorsement) and immediately applied to the Indebtedness in accordance with the Loan Documents.
(iii) Actions with Respect to Accounts; Notification of Account Debtors. Without limiting any other rights and remedies provided herein or otherwise available to Lender, Lender may exercise one or more of the rights and remedies provided in this Section during the existence of any uncured Default (upon not less than FIVE (5) days prior written notice by Lender) or Event of Default which has not been waived in writing by Lender. Lender’s rights to exercise the rights and remedies provided in this Section will end if and when all of Debtors’ obligations to Lender in connection with the Agreement have been satisfied. Each Debtor irrevocably makes, constitutes and appoints Lender (and any of Lender’s designated officers, employees or agents) as its true and lawful attorney in fact with power to sign its name and to take any of the following actions, in its name or in the name of Lender, as Lender may determine at any time (except as expressly limited in this Section 2(h)) without notice to such Debtor and at Debtors’ reasonable expense:
(A) Verify the validity and amount of, or any other matter relating to, the accounts by mail, telephone, telegraph or otherwise;
(B) Notify all account debtors that the accounts have been assigned to Lender and that Lender has a security interest in the accounts;
(C) Direct all account debtors to make payment of all accounts directly to Lender or the Lockbox Account;
(D) Take control in any manner of any cash or non-cash items of payment or proceeds of accounts;
(E) In any case and for any reason, notify the United States Postal Service to change the addresses for delivery of mail addressed to such Debtor to such address as Lender may designate, provided that Lender shall promptly forward to Debtor any such items not related to the accounts;
(F) In any case and for any reason, receive, open and dispose of all mail addressed to Debtor, provided that Lender shall promptly forward to Debtor any such items not related to the accounts;
(G) Take control in any manner of any rejected, returned, stopped in transit or repossessed goods relating to accounts;
(H) Enforce payment of and collect any accounts, by legal proceedings or otherwise, and for such purpose Lender may:
(I) Demand payment of any accounts or direct any account debtors to make payment of accounts directly to Lender;
(J) Receive and collect all monies relating to accounts due or to become due to such Debtor;
(K) Exercise all of such Debtor’s rights and remedies with respect to the collection of accounts;
(L) Settle, adjust, compromise, extend, renew, discharge or release accounts, for amounts and upon terms which Lender considers advisable;
(M) Sell or assign accounts on such terms, for such amounts and at such times as Lender deems advisable;
(N) Prepare, file and sign such Debtor’s name on any Proof of Claim or similar documents in any proceeding filed under federal or state bankruptcy, insolvency, reorganization or other similar law as to any account debtor;
(O) Prepare, file and sign such Debtor’s name on any Notice of Lien, or similar document in connection with the Collateral;
(P) Endorse the name of such Debtor upon any chattel papers, documents, instruments, invoices, freight bills, bills of lading, or similar documents or agreements relating to accounts or goods pertaining to accounts or upon any checks or other medium of payment or evidence of security interest that may come into Lender’s possession;
(Q) Sign the name of such Debtor to verifications of accounts and notices of Accounts sent by account debtors to such Debtor;
(R) Convert any unbilled account of any Debtor to a billed account; or
(S) Take all other actions necessary or desirable to protect such Debtor’s interest(s) in the accounts.
Each Debtor ratifies and approves all acts of said attorneys and agrees that said attorneys shall not be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law. This power, being coupled with an interest, is irrevocable until the Indebtedness is paid in full and Debtors shall have performed all of their obligations under this Agreement. Each Debtor further agrees to use its best efforts to assist Lender in the collection and enforcement of the accounts and will not hinder, delay or impede Lender in any manner in its collection and enforcement of the accounts. Lender agrees to maintain sufficient contemporaneous records of all account activity taking place under the provisions of this Section and to allow Debtor reasonable and timely access to those records, at Debtors’ reasonable expense.
7. Modification of Section 9(a). Effective JANUARY 1, 2016:
(a) Section 9(a) of the Agreement shall be modified by replacing “1.00 to 1.00” therein with “1.20 to 1.00.”
(b) The following shall be added as a new paragraph at the end of Section 9(a) of the Agreement:
Notwithstanding anything to the contrary contained above, in the event that Debtors fail to otherwise comply with the requirements of Section 9(a), Debtors shall have the right to include all or a portion of the cash proceeds from Permitted Cure Instruments (as defined below) in “Cash Flow” in addition to the includible items as defined in Section 1 hereunder, but only to the extent collected during a period extending from six (6) months prior to the relevant date of determination to one (1) month after the relevant date of determination. If, after giving effect to such inclusion, Debtors shall then be in compliance with the requirements of Section 9(a), Debtors shall be
deemed to have satisfied the requirements of such financial covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date. “Permitted Cure Instruments” shall mean either (1) any equity interest of Debtors other than an equity interest that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, either mandatorily or at the option of the holder thereof), or upon the happening of any event or condition: (a) requires the payment of any dividends or distributions (other than dividends or distributions payable solely in shares of equity interest) prior to the date that is 180 days after the Maturity Date, or (b) matures or is mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase at the option of the holders thereof, in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation, on a fixed date or otherwise, or is convertible or exchangeable at the option of the holder thereof for Indebtedness or equity interests, in each case prior to the date that is 180 days after the Maturity Date, (2) Subordinated Debt or (3) with Lender’s prior written consent, if not included in Debtors’ net income after taxes for purposes of calculating “Cash Flow” as provided by Section 1 hereunder, sales of revenues/customer accounts by Debtors to a separate legal entity.
8. Addition of New Section 10(f). A new Section 10(f) is hereby added the Agreement to read as follows:
(f)
Public Filings. If and when filed by any Debtor, (i) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports, (ii) any other filings made by such Debtor with the United States Securities and Exchange Commission, and (iii) any other information that is provided by any Debtor to its shareholders generally.
9. Modification of Note. The first sentence of Section 1 of the Note is hereby modified in its entirety to read as follows:
“The Rate shall be a rate per annum equal to the lesser of (a) the Maximum Rate, or (b) the greater of (i) Prime Rate plus SEVEN AND ONE-HALF PERCENT (7.5%), or (ii) ELEVEN PERCENT (11.00%).”
10. Covenants Regarding Dividends or Distributions. Debtors will not declare or pay any dividends or distributions on any equity interest of any Debtor to any Person if before or after such event an Event of Default or Default would exist.
11. Allowable Overadvance. After giving effect to the modifications set forth herein, an Overadvance in the amount of up to THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00) will have occurred (herein called the “Allowable Overadvance”) under the Credit Facility. Notwithstanding any other provisions of the Agreement, the Note, or any other Loan Document, such Allowable Overadvance will not be considered a default or an Event of Default under the Agreement, and Lender will agree to make Advances hereunder based on the Borrowing Base plus the Allowable Overadvance, provided that the Allowable Overadvance will be reduced according to the following schedule:
| | |
| DATE | ALLOWABLE OVERADVANCE |
| February 28 – March 30, 2016 | $275,000 |
| March 31 – April 29, 2016 | $250,000 |
| April 30 – May 30, 2016 | $200,000 |
| May 31 – June 29, 2016 | $150,000 |
| June 30 – July 30, 2016 | $100,000 |
| July 31, 2016 and thereafter | NONE |
12. Joinder and Assumption.
(a) OCC hereby acknowledges, agrees and confirms that, by the execution of this Joinder, it will, as if it had executed the Note and the other Loan Documents be and have all the obligations of (i) Debtors as a “Debtor” for all purposes of the Note and the other Loan Documents and this Joinder, and (ii) a party of identical capacity and obligations as Debtors to each of the Loan Documents. As of the Effective Date, OCC hereby ratifies and agrees to be bound by all of the terms, provisions and conditions contained in the Note, and the other Loan Documents which are binding upon Debtors; including, but not limited to the granting of a lien and security interest in the Collateral. OCC and each other Debtor hereby irrevocably and unconditionally: (i) agree that each is JOINTLY and SEVERALLY liable to Lender for the full and prompt payment and performance of the Indebtedness under the Loan Documents in accordance with the terms thereof; (ii) agree to fully and promptly perform all of their obligations hereunder and the other Loan Documents with respect to each loan as if such loan had been made directly to it; and (iii) agree as a primary obligation to indemnify Lender on demand for and against any loss incurred by Lender as a result of any of the indebtedness being or becoming void, voidable, unenforceable or ineffective for any reason whatsoever, whether or not known to Lender or any person, the amount of such loss being the amount which Lender would otherwise have been entitled to recover from any one or more of OCC, each other Debtor, and any other Person named as a Debtor under the Loan Documents from time to time. Each Debtor hereby agrees that such Debtor absolutely and unconditionally guarantees to Lender and its successors and assigns, the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Indebtedness owed or hereafter owing to Lender by any Debtor. Debtor agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, that its obligations under this Section shall not be discharged until indefeasible payment and performance, in full, of the Indebtedness has occurred, and that its obligations under this Section shall be absolute and unconditional.
(b) OCC hereby assumes, and agrees to perform and observe, each and every one of the covenants, rights, promises, agreements, terms, conditions, obligations, appointments, duties and liabilities applicable to each Debtor under the Note and each other Loan Document and to execute and deliver all documents or agreements as Lender may reasonably require in connection therewith.
(c) OCC acknowledges and confirms that it has received a copy of the Note and the Loan Documents.
(d) As of the date hereof, all references to the term “Debtor” or “Obligor” in the Note or any other Loan Document and in any document or instrument executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith, shall be deemed to be references to, and shall include, OCC, as a co-Debtor.
(e) Without limiting the generality of the foregoing, OCC hereby pledges to and grants Lender a security interest in, all of OCC’s right, title and interest in, to and upon all of OCC’s assets, including without limitation all of the Collateral now owned or hereafter acquired by OCC.
(f) This Joinder does not affect the obligations of Debtors under the Note and the other Loan Documents.
13. Conditions Precedent. The obligations of Lender under this Modification shall be subject to the condition precedent that each Debtor shall have executed and delivered to Lender this Modification and such other
documents and instruments incidental and appropriate to the transaction provided for herein as Lender or its counsel may reasonably request.
14. Payment of Fees and Expenses. Each Debtor agrees to pay all reasonable fees of Lender in connection with the drafting and execution of this Modification.
15. Ratifications. Except as expressly modified and superseded by this Modification, the Loan Documents are ratified and confirmed and continue in full force and effect. The Loan Documents, as modified by this Modification, continue to be legal, valid, binding and enforceable in accordance with their respective terms. Without limiting the generality of the foregoing, each Debtor hereby ratifies and confirms that all liens heretofore granted to Lender were intended to, do and continue to secure the full payment and performance of the Indebtedness. Each Debtor agrees to perform such acts and duly authorize, execute, acknowledge, deliver, file and record such additional assignments, security agreements, modifications or agreements to any of the foregoing, and such other agreements, documents and instruments as Lender may reasonably request in order to perfect and protect those liens and preserve and protect the rights of Lender in respect of all present and future Collateral. The terms, conditions and provisions of the Loan Documents (as the same may have been amended, modified or restated from time to time) are incorporated herein by reference, the same as if stated verbatim herein.
16. Representations, Warranties and Confirmations. Each Debtor hereby represents and warrants to Lender that (a) this Modification and any other Loan Documents to be delivered under this Modification (if any) have been duly executed and delivered by such Debtor, are valid and binding upon such Debtor and are enforceable against such Debtor in accordance with their terms, except as limited by any applicable bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and except to the extent specific remedies may generally be limited by equitable principles, (b) no action of, or filing with, any governmental authority is required to authorize, or is otherwise required in connection with, the execution, delivery and performance by such Debtor of this Modification or any other Loan Document to be delivered under this Modification, and (c) the execution, delivery and performance by such Debtor of this Modification and any other Loan Documents to be delivered under this Modification do not require the consent of any other person and do not and will not constitute a violation of any laws, agreements or understandings to which such Debtor is a party or by which such Debtor is bound.
17. Release. Each Debtor hereby acknowledges and agrees that there are no defenses, counterclaims, offsets, cross-complaints, claims or demands of any kind or nature whatsoever to or against Lender or the terms and provisions of or the obligations of such Debtor under the Loan Documents and the other agreements, instruments and documents evidencing, securing, governing, guaranteeing or pertaining thereto, and that such Debtor has no right to seek affirmative relief or damages of any kind or nature from Lender. To the extent any such defenses, counterclaims, offsets, cross-complaints, claims, demands or rights exist, such Debtor hereby waives, and hereby knowingly and voluntarily releases and forever discharges Lender and its predecessors, officers, directors, agents, attorneys, employees, successors and assigns, from all possible claims, demands, actions, causes of action, defenses, counterclaims, offsets, cross-complaints, damages, costs, expenses and liabilities whatsoever, whether known or unknown, such waiver and release being with full knowledge and understanding of the circumstances and effects of such waiver and release and after having consulted legal counsel with respect thereto.
18. Multiple Counterparts. This Modification may be executed in a number of identical separate counterparts, each of which for all purposes is to be deemed an original, but all of which shall constitute, collectively, one agreement. Signature pages to this Modification may be detached from multiple separate counterparts and attached to the same document and a telecopy or other facsimile of any such executed signature page shall be valid as an original.
19. Reference to Agreement. Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof containing a reference to the Agreement shall mean and refer to the Agreement as amended hereby.
20. Severability. Any provision of this Modification held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Modification and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.
21. Headings. The headings, captions, and arrangements used in this Modification are for convenience only and shall not affect the interpretation of this Modification.
NOTICE OF FINAL AGREEMENT
THE AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THIS MODIFICATION, REPRESENT THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN AND AMONG THE PARTIES
IN WITNESS WHEREOF, the parties have caused this Modification to be duly executed as of the Effective Date.
LENDER:
ADDRESS:
THERMO CREDIT, LLC
639 Loyola Avenue, Suite 2565
New Orleans, LA 70113
By:
/s/ Seth Block
Name:
Seth Block
Title:
Executive Vice President
DEBTORS:
ADDRESS:
ONSTREAM MEDIA CORPORATION
1291 SW 29 Avenue
INFINITE CONFERENCING, INC.
Pompano Beach, FL 33069
ENTERTAINMENT DIGITAL NETWORK, INC.
OSM ACQUISITION, INC.
ONSTREAM CONFERENCING CORPORATION
AV ACQUISITION, INC.
AUCTION VIDEO JAPAN, INC.
HOTELVIEW CORPORATION
MEDIA ON DEMAND, INC.
By:
/s/ Randy S, Selman
Name:
Randy S. Selman
Title:
Chief Executive Officer