Exhibit 10.2G
FORBEARANCE AGREEMENT
Agreement dated August 8, 2000, between LCS GOLF, INC. a Delaware corporation,
having an address at 24 East 12th Street, New York, New York 10003 (hereafter
referred to as "LCSG" or "Borrower") and QUINTEL COMMUNICATIONS, INC., a
Delaware corporation, having an address at One Blue Hill Plaza, Pearl River, New
York 10965 (hereafter referred to as "Quintel"or "Lender"). Quintel and LCSG are
sometimes referred to as a "Party" or the "Parties".
W I T N E S S E T H :
WHEREAS, LCSG borrowed $500,000.00 from Quintel (the "Loan") as evidenced
by LCSG's promissory note dated February 16, 2000 in the original principal
amount of $500,000.00 (the "LCS Note") delivered pursuant to a Loan Agreement
between Lender and Borrower dated February 16, 2000 (the "Loan Agreement"), and
WHEREAS, pursuant to a Security Agreement dated February 16, 2000 (the
"Security Agreement"), LCSG secured its obligations under the Loan Agreement and
the LCS Note by granting Quintel a security interest in LCSG's Database (as such
term is defined in the Security Agreement) and all contracts, contract rights
and general intangibles of the Company relating to or necessary in order to use
the Database; and
WHEREAS, concurrently with the entry into the Loan Agreement, Quintel and
LCSG entered into a Marketing Agreement dated February 16, 2000 (the "Marketing
Agreement"), pursuant to which, among other things, Quintel was granted the
right to transmit e-mail messages marketing or promoting Quintel Products and
Services (as such term is defined in the Security Agreement) to the Database;
and
WHEREAS, Quintel has agreed on the terms set forth in this Agreement to
forbear from instituting an action to collect the amount due under the LCS Note.
NOW, THEREFORE, the parties, in consideration of the mutual
representations and covenants contained herein, hereby agree as follows:
1. Quintel acknowledges receipt of one $50,000.00 payment on account of the
principal amount of the LCS Note, and that the principal balance of the
Note as of the date of such payment and the date hereof is $450,000.00.
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2. Quintel and LCSG agree that the LCS Note is hereby amended to provide for
payment on written demand after the date hereof and that interest shall be
paid on the unpaid principal balance of the LCS Note at the rate of seven
percent (7%) per annum commencing as of the date hereof and until the
occurrence of a default under the terms of this Agreement or the LCS Note,
after which interest shall be paid on the amounts due under the LCS Note
at an annual rate equal to the prime rate (as defined in the LCS Note)
plus four (4 %) percent, but in no event shall the annual rate of interest
charged under the LCS Note exceed fourteen (14 %) percent. Interest shall
be payable monthly on the first day of each month commencing August 1,
2000,
3. Concurrently herewith:
1. Michael Mitchell ("Guarantor") has executed and delivered to Quintel
his guarantee of the LCS Note in the form annexed hereto as Exhibit
1; and
2. LCSG has executed and delivered to Quintel an amendment to the
Security Agreement in the form annexed hereto as Exhibit 2,
providing among other things for the assignment to Quintel of all
accounts receivable of LCSG now or hereafter existing, and all
proceeds thereof ("Accounts") as additional Collateral for the
repayment of the LCS Note and the performance and payment of all
obligations under this Agreement and the other Obligations
identified in the Security Agreement and four (4) copies of a form
UCC-3 financing statement to amend the financing statement executed
by LCSG as debtor previously filed to include the collateral covered
by the amendment to the Security Agreement.
3. LCSG has delivered a certificate signed by its President and Chief
Financial Officer certifying as true and correct the representations
and warranties made in Section 4 below and that the execution of
this Agreement and the amendment to the Security Agreement by LCSG
have been duly authorized by all necessary corporate action of LCSG,
and constitute the lawful, valid and binding obligations of LCSG,
enforceable in accordance with their terms;
4. LCSG has delivered the appropriate forms establishing the Lockbox
Account referred to in Section 5 below, identifying representatives
of Quintel as the sole signatories to such account, together with an
irrevocable direction to the Depository Bank not to modify such
signatories without Quintel's written consent.
4. LCSG represents and warrants to Quintel that annexed hereto as Schedule 1
is a true, complete and correct list of all Accounts of LCSG, and which
are hereby assigned to Quintel under the provisions of this Agreement and
the Security Agreement, and that:
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1. Each of the debtors named in the Accounts included in Schedule
1 is indebted to LCSG in the amount indicated as of August 14,
2000.
2. Each Account is bona fide, and arises out of the sale and
delivery of goods or services.
3. None of the Accounts is now, or will at any time become,
contingent upon the fulfillment of any contract whatsoever, or
subject to any defense, offset or counterclaim, except as may
be specifically noted in Schedule 1.
4. No agreement has been made, nor will be made, with any debtor
for any, reduction or discount, other than reductions or
discounts which in the aggregate are not material, except as
may be specifically noted in Schedule 1.
5. None of the Accounts is represented by notes or other
negotiable instruments, except those that have been endorsed
and delivered by LCSG to Quintel simultaneously with the
delivery of this Agreement, or as set forth in Schedule 1.
6. LCSG is the sole owner of the Accounts, free and clear of any
encumbrances, and has the right to transfer absolute title to
Quintel.
7. The stated due date on each Account on Schedule 1 is correct,
except for variations which in the aggregate are not material.
5. The schedule of Accounts shall be updated on a monthly basis by LCSG,
within ten days after the first day of each month commencing with August,
2000, and certified by its President and Chief Financial Officer as true,
correct and complete, and LCSG represents and warrants to Quintel that all
such updates shall be true, correct and complete schedules of its
Accounts. Such schedules shall contain the name, address and, if known,
telephone number and e-mail address of each Account debtor.
1. Concurrently herewith, LCSG has delivered, and until payment in full
of the LCS Note shall continue to deliver to all of the Account
Debtors an irrevocable letter of direction to make all payments on
the Accounts to a lockbox account at Bank of America, N.A. (the
"Depository Bank"), as to which representatives of Quintel shall be
the sole signatories (the "Lockbox Account".)
2. Until payment in full of all amounts due under the LCS Note and the
Security Agreement:
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1. fifty percent (50%) of collections received in the Lockbox
Account on the Accounts identified on Schedule 1 and
seventy-five percent (75%) of collections received in the
Lockbox Account on Accounts created after the date hereof
shall be paid within five (5) days after receipt to LCSG, and
the balance shall be paid to Quintel and credited against the
amounts due under the LCS Note, first to interest and then to
principal;
2. if LCSG receives any collections of the Accounts, LCSG shall
pay fifty percent (50%) of collections of the Accounts
identified on Schedule 1 and twenty-five percent (25%) of
collections of Accounts created after the date hereof to
Quintel within five (5) days after receipt, which payments to
Quintel shall be credited against the amounts due under the
LCS Note, first to interest and then to principal, and
3. LCSG shall pay to Quintel within five (5) days after receipt
fifty percent (50%) of all other cash receipts, cash
equivalents and marketable securities generated by LCSG from
any source whatsoever, including from proceeds from loans or
sales of assets, stock or other securities of LCSG unless
Quintel consents in writing to different payment arrangements
with respect to proceeds from loans or sales of assets or
stock.
3. Upon the occurrence of a default, all proceeds of the Accounts shall
be applied in the manner provided in Section 4 of the Security
Agreement.
6. Until payment in full of all amounts due under the LCS Note and the
Security Agreement, LCSG shall deliver to Quintel within ten (10) business
days after the first day of each month:
1. a financial statement of LCSG and its subsidiaries setting forth all
income and expenses for the preceding month and for the calendar
year to date, certified as true and correct in all material respects
by LCSG's President and Chief Financial Officer;
2. the schedule of new Accounts referred to in Section 4(a) above,
certified as true and correct in all material respects by LCSG's
President and Chief Financial Officer;
3. a statement of all collections of Accounts received by LCSG during
the preceding month, certified as true and correct in all material
respects by LCSG's President and Chief Financial Officer.
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2. Quintel and LCSG shall request the Depository Bank to deliver to
Quintel and LCSG a monthly statement of all collections of Accounts
received in the Lockbox Account during the preceding month.
3. Upon payment in full of all amounts due to Quintel under the LCS
Note and the Security Agreement, LCSG may deliver a letter of
direction to the remaining Account Debtors consenting to payment of
the Accounts being made to LCSG.
7. Quintel shall continue to have the right to transmit e-mail messages to
the Names in the Database marketing or promoting Quintel Products and
Services in accordance with the provisions of the Marketing Agreement, and
LCSG agrees to perform its obligations under the Marketing Agreement,
including the provision of updates to the Database on a monthly basis.
LCSG represents and warrants to Quintel that all additional Names in the
Database shall be valid Names which shall have consented to the receipt of
offers of products and services from LCSG's marketing affiliates and
partners.
1. Until payment in full of the amounts due under the LCS Note and the
Security Agreement:
1. the twenty-five cent ($0.25) Multibuyer Record Fee payable by
Quintel under the Marketing Agreement for every valid Name
delivered to Quintel or its Affiliate for registration in
multibuyer.com or grouplotto shall be credited by Quintel
monthly to the amounts due under the LCS Note, first to
interest and then to principal, within thirty (30) days after
the end of each month in which a Member Record is delivered,
and
2. LCSG's share of Net Revenue under the Marketing Agreement
shall be credited by Quintel monthly to the amounts due under
the LCS Note, first to interest and then to principal, at the
time payment of LCSG's share of Net Revenue is due under the
Marketing Agreement.
8. Notwithstanding the provisions of Section 2 and the LCS Note, Quintel will
forbear from demanding payment of the LCS Note or commencing any action
against LCSG or its officers and directors with respect to the making of
the Loan and the entry into the Marketing Agreement, provided that:
1. Quintel receives at least $10,000.00 per month in payments of
principal and interest on the LCS Note from LCSG, or
collections of the Accounts, or from the Guarantor, and
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2. LCSG is generating gross revenues of at least $75,000.00 per
calendar month from the normal conduct of its business, and
3. LCSG is not in default in the performance of its obligations
under this Agreement.
9. Nothing contained herein or in the Guaranty or the amendment to the
Security Agreement shall be deemed to be or construed as a waiver by
either party of any claims or other rights which it may have against the
other party or their respective officers and directors with respect to the
Loan, the LCS Note, the Marketing Agreement and the transactions described
therein, all of which are specifically reserved.
10. Upon receipt of payment of $300,000.00 under the LCS Note, Quintel shall
deliver to LCSG a standard form of general release, releasing LCSG and its
officers and directors from any claims regarding the Loan, the LCS Note,
the Marketing Agreement and the transactions described therein in
existence as of the date of this Agreement, and specifically excluding any
claims arising under the Marketing Agreement and the transactions
described therein after the date of this Agreement and any balance due
under the LCS Note and the Security Agreement.
11. The interpretation and construction of this Agreement, and all matters
relating hereto, shall be governed by the law of the State of New York,
without reference to its conflict of laws provisions. Unless applicable
law requires a different method, any notice that must be given to LCSG
under this Agreement will be given by delivering it or mailing it by first
class mail to LCSG at its address set forth at the beginning of this
Agreement or at such other address as LCSG may give notice of to the
holder of this Agreement. Any action brought to enforce this Agreement may
be brought in the State of New York, and each Party hereby consents to the
personal jurisdiction of the federal and state courts located in the State
of New York, and agrees that unless applicable law requires a different
method, service of process in any such action may be made by first class
mail upon a Party at its address set forth in the beginning of this
Agreement or at such other address as a Party shall advise the other Party
by written notice in accordance with this Agreement.
12. Any notice or other communications required or permitted hereunder or
under the Marketing Agreement shall be in writing and shall be deemed
effective (a) upon personal delivery, if delivered by hand; (b) one day
after the date of delivery by Federal Express or other nationally
recognized courier service that provides a delivery receipt, if delivered
by priority overnight delivery between any two points within the United
States; or (c) five days after deposit in the mails, if mailed by
certified or registered mail (return receipt requested) between any two
points within the United States, and in each case of mailing, postage
prepaid, addressed to a party at its address
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first set forth above, with copies to. Feder, Kaszovitz, Isaacson, Weber,
Skala & Bass LLP, 750 Lexington Avenue, New York, New York 10022-1200,
Attention: Geoffrey A. Bass, Telecopier #:212-888-7776, and to Littman
Krooks Roth & Ball P.C., 655 Third Avenue, New York, NY 10017 Attn:
Mitchell C. Littman, Telecopier #:212-490-2990, or such other address and
telecopier number as shall be furnished in writing by like notice by any
such party.
13. In the event any provision of this Agreement is found to be void and
unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall nevertheless be binding upon the
parties with the same effect as though the void or unenforceable part had
been severed and deleted.
14. This Agreement may be executed in two or more counterparts, all of which
taken together shall constitute one instrument. This Agreement, the
Guaranty, and the amendment to the Security Agreement contain the entire
understanding of the parties hereto with respect to the subject matter
contained herein and therein. This Agreement, the Guaranty, and the
amendment to the Security Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter,
except that the foregoing shall not impair the effectiveness of the LCS
Note or the Marketing Agreement, which remain in effect in accordance with
the respective terms except as modified by this Agreement. This Agreement
may not be changed orally, but only by an agreement in writing signed by
all parties.
IN WITNESS WHEREOF, the parties have each caused its corporate name to be
hereunto subscribed by their respective duly authorized officers on the date
first written above.
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey Schwartz
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Name: Jeffrey Schwartz
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Title: CEO
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LCS GOLF, INC.
By: /s/ Michael Mitchell
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Name: Michael Mitchell
Title: Preseident/CEO
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STATE OF NEW YORK: COUNTY OF ________________________: ss:
On the 8th day of August in the year 2000, before me, the undersigned, a Notary
Public in and for said state, personally appeared Michael Mitchell, personally
known to me or proved to me on the basis or satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed same in his capacity, and that by his signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
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Notary Public
STATE OF NEW YORK: COUNTY OF ________________________: ss:
On the _____ day of August in the year 2000, before me, the undersigned, a
Notary Public in and for said state, personally appeared
____________________________________, personally known to me or proved to me on
the basis or satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed same in his
capacity, and that by his signature on the instrument, the person, or the entity
upon behalf of which the person acted, executed the instrument.
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Notary Public
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SCHEDULE 1
List of Accounts
