EXHIBIT 10.4
AMENDMENT NUMBER 2
TO
SECURITIES PURCHASE AGREEMENT
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THIS IS AMENDMENT NUMBER 2 (the "Amendment") being executed and
delivered by and between Rapid Link, Inc., formerly known as Dial-Thru
International Corporation, a Delaware corporation ("Rapid"), and GCA
Strategic Investment Fund Limited, a Bermuda corporation ("GCASIF"), and
dated as of August 15, 2006, in order to amend that certain Securities
Purchase Agreement by and between Rapid and GCASIF dated as of January 28,
2002, as amended by Amendment Number 1 dated as of June 1, 2005 (the
"Securities Purchase Agreement").
RECITALS
A. The parties to this Amendment wish to amend certain terms of
that certain secured promissory note dated as of January 28, 2002 in the
principal amount of $550,000 (the "Note") issued pursuant to the Securities
Purchase Agreement, all as further set forth below.
B. In consideration of the accommodations and amendments set forth
in this Amendment, Rapid will amend all presently exercisable warrants to
purchase shares of Rapid's Common Stock held by GCASIF (the "Warrants"), on
the terms and conditions set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises contained in
this Amendment and other good and valuable consideration, the sufficiency,
mutuality and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Amendment of the Note. The Note shall be amended and restated as
follows: (a) the Note shall be amended such that the Maturity Date shall be
changed to November 1, 2007; (b) the conversion price of the common stock of
Rapid shall not be lower than $0.10 and not to exceed $0.25; and (c) Rapid
shall have the option to repay in full the principal and accrued interest on
the Note at a discount of 20% up to December 1, 2006; thereafter the
discount shall decrease to 15% up to March 1, 2007; thereafter the discount
shall decrease to 10% up to June 1, 2007; thereafter the discount shall
decrease to 0% and be of no further effect.
2. Amendment of Warrants. In connection with the agreement by GCASIF
to accept the discounted repayments set forth herein, Rapid shall re-price
all Warrants presently held by GCASIF to an exercise price of $0.05 and
extend the maturity of said Warrants to June 1, 2010. The common shares
underlying the Warrants will not be sold before August 31, 2007.
3. Additional Waivers. In furtherance of this amendment, GCASIF shall
waive any and all (a) breaches, violations and Events of Default by Rapid
arising prior to the date hereof under or pursuant to the Securities
Purchase Agreement, including without limitation, any Registration Default
(including any violation of Section 3.4(a) in respect thereof) and any Event
of Default set forth in Sections 12.1(d), (e), (i) and (l) and (b), all
damages, costs, fees and expenses arising directly or indirectly from such
breaches, violations and defaults, including without limitation, any and all
accrued amounts arising from or pursuant to default interest rates and
liquidated damages that otherwise may be due and owing by Rapid under the
Securities Purchase Agreement. In the interest of clarity, the parties to
this Amendment agree that all existing breaches, violations and Events of
Default under or pursuant to the Securities Purchase Agreement for any
action or failure to act by Rapid that remain uncured on the Effective Date
are, and will continue to be, waived by GCASIF on and after such date. In
that regard, Rapid shall remain subject to the terms and conditions of the
Securities Purchase Agreement following the Effective Date and shall
otherwise be liable for any and all breaches or violations of the terms
thereof after the Effective Date; provided further that, in the interest of
clarity, GCASIF has not declared any Event of Default under any of the
Transaction Documents as of the Effective Date.
4. No Other Effect on the Securities Purchase Agreement. Except as
amended by this Amendment, the Securities Purchase Agreement remains in full
force and effect.
5. Effective Date. This Amendment shall be effective as of September
14, 2006 (the "Effective Date").
6. Miscellaneous.
(a) Captions; Certain Definitions. Titles and captions of
or in this Amendment are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Amendment or the intent of any of its provisions. All capitalized terms not
otherwise defined herein shall have the meaning therefore, as set forth in
the Securities Purchase Agreement
(b) Controlling Law. This Amendment is governed by, and shall be
construed and enforced in accordance with the laws of the State of Delaware
(except the laws of that jurisdiction that would render such choice of laws
ineffective).
(c) Counterparts. This Amendment may be executed in one or more
counterparts (one counterpart reflecting the signatures of all parties),
each of which shall be deemed to be an original, and it shall not be
necessary in making proof of this Amendment or its terms to account for more
than one of such counterparts. This Amendment may be executed by each party
upon a separate copy, and one or more execution pages may be detached from a
copy of this Amendment and attached to another copy in order to form one or
more counterparts.
IN WITNESS WHEREOF, this Amendment has been executed and delivered
by Rapid and GCASIF as of the date first set forth above.
Rapid: Rapid Link, Inc.
By:
Name:__________________________________
Title:___________________________________
GCASIF: GCA STRATEGIC INVESTMENT FUND LIMITED
By:
Name:__________________________________
Title:___________________________________
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