UNITED STATES
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): July 1, 2003 (June 25,
2003)
ALTERNATE MARKETING NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-26624 38-2841197
(State of other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification Number)
13155 Noel Road, 10th Floor, Dallas, TX 75240
(Address of principal executive offices) (Zip Code)
(972) 720-3500
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Item 5. Other Events.
In response to decreased revenues in the Company's technology segment, Hencie
Consulting Services, Inc., the Company has reduced its technology segment's
operating expenses by (i) decreasing the number of employees in the segment
and (ii) executing an amendment to its lease for the segment which reduces
the square footage from approximately 13,484 square feet to approximately
6,687 square feet. In addition, the segment settled a dispute regarding
previously unpaid rent by providing the landlord with a $100,000 promissory
note, carrying an interest rate of ten percent (10%) per annum, in exchange
for the landlord's waiver of the segment's obligation to pay the remainder of
the outstanding rent. From July 1, 2003 until and including November 1,
2003, the segment must make a $10,000 payment to the landlord on the first
day of each calendar month. Thereafter, the segment must make a $5,000
monthly payment to the landlord until the principal and interest are paid in
full. Alternate Marketing Networks, Inc. and two of its subsidiaries,
National Home Delivery, Inc. and Alternate Postal Direct, Inc., have
guaranteed the technology segment's obligations under the amended office
lease and promissory note. Also, Adil Khan, Chief Executive Officer of the
technology segment, has renewed a personal guarantee of $75,000 of the
segment's obligations under the amended office lease and promissory note.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
10.1 First Amendment to Office Lease Agreement between
TrizecHahn Tower Three Galleria Management, L.P. and
Hencie Consulting Services, Inc. (filed herewith)
10.2 Continuing Lease Guaranty between TrizecHahn Tower Three
Galleria Management, L.P., Alternate Marketing
Networks, Inc., National Home Delivery, Inc., and
Alternate Postal Direct, Inc. (filed herewith)
10.3 Amended and Restated Continuing Lease Guaranty between
TrizecHahn Tower Three Galleria Management, L.P. and
Adil Khan (filed herewith)
10.4 Promissory Note between TrizecHahn Tower Three Galleria
Management, L.P. and Hencie Consulting Services, Inc.
(filed herewith)
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.
Dated: July 1, 2003.
ALTERNATE MARKETING NETWORKS, INC.
By: /s/ Phillip D. Miller
Name: Phillip D. Miller
Title: President
EXHIBIT INDEX
Exhibit No. Description
10.1 First Amendment to Office Lease Agreement between
TrizecHahn Tower Three Galleria Management, L.P. and
Hencie Consulting Services, Inc. (filed herewith)
10.2 Continuing Lease Guaranty between TrizecHahn Tower Three
Galleria Management, L.P., Alternate Marketing
Networks, Inc., National Home Delivery, Inc., and
Alternate Postal Direct, Inc. (filed herewith)
10.3 Amended and Restated Continuing Lease Guaranty between
TrizecHahn Tower Three Galleria Management, L.P. and
Adil Khan (filed herewith)
10.4 Promissory Note between TrizecHahn Tower Three Galleria
Management, L.P. and Hencie Consulting Services, Inc.
(filed herewith)
Exhibit 10.1
FIRST AMENDMENT TO OFFICE LEASE AGREEMENT
THIS FIRST AMENDMENT TO OFFICE LEASE AGREEMENT (this "First Amendment")
is made and entered into the 25th day of June, 2003, by and between TRIZECHAHN
TOWER THREE GALLERIA MANAGEMENT, L.P. (hereinafter called "Landlord"), and
HENCIE CONSULTING SERVICES, INC., a Texas corporation (hereinafter called
"Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant entered into that certain Office Lease
Agreement dated October 24, 2001 (the "Lease"), with respect to the lease of
approximately 13,484 square feet of Net Rentable Area located on Floor 10
(the "Leased Premises") of the office building commonly known as Three
Galleria Tower located at 13155 Noel Road, Dallas, Texas (the "Building");
and
WHEREAS, Landlord and Tenant now desire to amend the Lease, among other
things, to provide for the downsizing of the Premises, reduction of Basic
Rent and addition of Alternate Marketing Networks, Inc., as a guarantor of
the Lease, all on the terms and conditions set forth below; and
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree that the Lease is amended as follows:
1. Defined Terms. All capitalized terms utilized herein and not defined
herein shall have the meaning ascribed thereto in the Lease.
2. Cash Payment; Release. In consideration for a cash payment of
$50,000.00, which upon receipt thereof and execution by Tenant of this First
Amendment, Promissory Note and execution of the Continuing Lease Guaranty and
the Amended and Restated Continuing Lease Guaranty, Landlord shall allow
Tenant to re-enter the Premises and shall, effective as of the date the final
payment under the terms of the Promissory Note is received by Landlord,
release Tenant from all Rent due and owing prior to December 31, 2002. In
additional to the release contained in the foregoing sentence, Landlord
agrees that it will not, during the Term or thereafter, pursue collection of
any Rent due and payable from and after January 1, 2003 until May 31, 2003,
provided Tenant pays, without default, all amounts provided under the Lease
due after June 1, 2003 and that certain Promissory Note in the amount of
$100,000.00 of the same date as this First Amendment entered into by Tenant
for the benefit of Landlord. Notwithstanding anything to the contrary
contained in this Section, in no event shall Landlord have the right to
recover any Rent or other amounts due and payable by Tenant prior to May 31,
2003 from Alternate Marketing Networks, Inc., a Michigan corporation National
Home Delivery, Inc., an Illinois corporation, and Alternate Postal Direct,
Inc., a Michigan corporation should Landlord ever become entitled to seek the
recovery thereof from Tenant.
3. Premises. Effective as of June 1, 2003, the Premises shall be reduced to
approximately 6,687 square feet of Agreed Rentable Area as set forth on the
attached Exhibit A, and all references contained in the Lease to the Premises
shall (after June 1, 2003) refer to the area so depicted on said Exhibit A.
Tenant shall immediately surrender the remaining area comprised of
approximately 6,797 square feet of Rentable Area formerly occupied by Tenant
to Landlord in a safe, clean, neat, sanitary and operational condition
(ordinary wear and tear excepted) and as otherwise required by Lease for the
redelivery of the Premises at the expiration of the Term. Landlord shall, at
is sole discretion, determine the exact location of the new demising wall and
to the extent the actual numbers vary from those set forth in this Section,
Landlord and Tenant will confirm the actual numbers in writing within thirty
(30) days from the date of this First Amendment.
4. Condition of the Premises. Tenant accepts the Premises, as described in
the foregoing section of this First Amendment in its current "AS IS"
condition and "WITH ALL FAULTS", and Tenant agrees that any and all costs
associated with demising the Premises from the space surrendered to Landlord
in accordance with this First Amendment, pursuant to all applicable Laws
shall be borne solely by Tenant, who shall pay such cost and provide to
Landlord copies of all paid invoices and lien releases from each contractor
engaged to perform such work. TENANT FURTHER ACKNOWLEDGES AND AGREES THAT
LANDLORD DOES HEREBY DISCLAIM ANY AND ALL WARRANTIES, EXPRESS AND IMPLIED,
INCLUDING BUT NOT LIMITED TO THOSE OF FITNESS FOR A PARTICULAR PURPOSE, WITH
RESPECT TO THE FIRST EXPANSION PREMISES AND/OR THE IMPROVEMENTS LOCATED
THEREIN
5. Rent. Basic Rent and Additional Rent shall be paid in accordance with
Item 3 through 7 of the Basic Lease Provisions and Article 2 of the
Supplemental Lease Provisions, except that as of the June 1, 2003, the
applicable section referred to herein shall be amended as follows:
A. The table which sets forth the amount of Basic Rent to be paid by
Tenant shall be amended to read as follows:
Annual Rate per Square Foot of Agreed Basic Annual Basic Monthly
Rentable Area Rent Rent
$22.00 $147,114.00 $12,259.50
B. The "Tenant's Operating Expense Stop" shall be amended to read as
follows: "Tenant's Operating Expense Stop shall be equal to actual Operating
Expenses for the calendar year 2003, grossed up in accordance with subsection
2.202 of the Supplemental Lease Provisions."
C. The "Tenant's Real Estate Taxes Stop" shall be amended to read as
follows: "Tenant's Real Estate Taxes Stop shall be equal to actual Real
Estate Taxes for the calendar year: 2003."
Notwithstanding anything to the contrary contained herein, Landlord agrees
that Rent otherwise due and payable on June 1, 2003, shall be due and payable
on June 6, 2003.
6. Promissory Note. As a material inducement to Landlord in entering into
this First Amendment, Tenant shall enter into a Promissory Note in the amount
of One Hundred Thousand Dollars ($100,000.00) which shall be executed
simultaneously with this First Amendment. Tenant agrees that (i) any default
under the terms and provisions of the Promissory Note, or (ii) if Tenant or
Alternate Marketing Networks, Inc., National Home Delivery, Inc., Alternate
Postal Direct, Inc. (collectively the "Corporate Guarantors"), or a successor
in interest thereto files a petition for relief under the Federal Bankruptcy
Code or any other present or future federal or state insolvency, bankruptcy
or similar law (collectively, "applicable bankruptcy law"); a receiver or
trustee is appointed for Tenant or the Corporate Guarantors or its property;
the interest of Tenant or the Corporate Guarantors under this Lease is levied
on under execution or under other legal process; any involuntary petition is
filed against Tenant or the Corporate Guarantors under applicable bankruptcy
law; or any action is taken to reorganize or modify Tenant's or the Corporate
Guarantors' capital structure if either Tenant or the Corporate Guarantors is
a corporation or other entity, shall, without further notice or cure period,
constitute a default under the Lease.
7. Finish Allowance. Tenant agrees that effective as of January 1, 2003,
Tenant shall forfeit and Landlord shall retain any unused portion of the
Finish Allowance not actually used which was provided under the Work Letter
attached to the Lease as Exhibit D and that (i) any amount credited to Tenant
from such Finish Allowance as a cash inducement (i.e. credit against Basic
Rent) shall be refunded to Landlord and (ii) no further amounts will be
disbursed or applied as a credit against Basic Credit from said Finish
Allowance by Landlord.
8. Guarantors. As a material inducement to Landlord in entering into this
First Amendment, Adil Kahn shall guaranty $75,000.00 of the obligations of
Tenant under the Lease, as amended by this First Amendment and Alternate
Marketing Networks, Inc., a Michigan corporation National Home Delivery,
Inc., an Illinois corporation, and Alternate Postal Direct, Inc., a Michigan
corporation shall guaranty one hundred percent (100%) of the obligations of
Tenant under the Lease, as amended by this First Amendment, pursuant to the
attached Continuing Lease Guaranty.
9. Notices. Landlord's address for notices required or permitted to be
given under the Lease shall be as follows:
TrizecHahn Tower Three Galleria Management, L.P.
Two Galleria Tower
13455 Noel Road, Suite 2300
Dallas, Texas 75240
Attn: Property Manager
with a copy to:
TrizecHahn Tower Three Galleria Management, L.P.
c/o Trizec Holdings, Inc.
1200 Smith Street, Suite 1200
Houston, Texas 77002
Attention: Senior Vice President
10. Landlord's Lien. Tenant grants to Landlord an express contract lien on
and security interest in and to all goods, equipment, furnishings, fixtures,
furniture, chattels and personal property of whatever nature owned by Tenant
attached or affixed to or used in and about the Premises on the date of this
First Amendment or at any time after the date hereof or otherwise located in
the Premises and all renewals or replacements or substitutions for any of the
foregoing, all building materials and equipment now or hereafter delivered to
the Premises and intended to be installed in the Premises and all security
deposits and advance rentals under lease agreements on the date of this Lease
or at any time after the date of this Lease covering or affecting the
Premises and held by or for the benefit of Tenant and all proceeds of the
foregoing (including by way of illustration, but not limitation, proceeds of
any insurance which may accrue to Tenant by reason of damage or destruction
of any such property). Landlord shall be authorized to file a financing
statement and have all the rights and remedies of a secured party under the
Texas Business and Commerce Code and this lien and security interest may be
foreclosed by process of law. The requirement of reasonable notice prior to
any sale under Article 9 of the Texas Business and Commerce Code shall be met
if such notice is given in the manner prescribed herein at least ten (10)
days before the day of sale. Any sale made pursuant to the provisions of
this Section shall be deemed to have been a public sale conducted in a
commercially reasonable manner.
11. Calculation of Charges. Tenant (i) understands and accepts the methods
of calculation for determining charges, amounts and additional rent payable
by Tenant under the Lease, as modified hereby, and (ii) waives (to the
fullest extent permitted by applicable law) all rights and benefits of Tenant
under Section 93.004 (Assessment of Charges) of the Texas Property Code, as
such section now exists or as it may be hereafter amended or succeeded.
12. Broker. Tenant represents and warrants that no broker has represented it
in this First Amendment and that no broker is owed a commission or fee in
connection with the consummation of this First Amendment transaction. Tenant
hereby indemnifies and holds Landlord harmless against any loss, claim,
expense or liability with respect to any commissions or brokerage fees
claimed on account of this First Amendment due to any action of Tenant. The
provisions of this Paragraph shall survive the expiration of the term of the
Lease as extended.
13. Binding Effect. Landlord and Tenant hereby ratify and reaffirm the
Lease. This First Amendment shall become effective only upon full execution
and delivery of this First Amendment by Landlord and Tenant. This First
Amendment contains the parties' entire agreement regarding the subject matter
covered by this First Amendment, and this First Amendment, together with the
Lease supersedes all prior correspondence, negotiations, and agreements, if
any, whether oral or written, between the parties concerning such subject
matter. There are no contemporaneous oral agreements, and there are no
representations or warranties between the parties not contained in this First
Amendment. As modified by this First Amendment, the terms and provisions of
the Lease shall remain in full force and effect, and the Lease, as modified
by this First Amendment, shall be binding upon and shall inure to the benefit
of the parties hereto, their successors and permitted assigns.
14. Successors and Assigns. This First Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns.
15. Governing Law. This First Amendment shall be governed by and construed
in accordance with the laws of the State of Texas.
[The remainder of this page is intentionally blank]
This First Amendment is executed on the date indicated above.
LANDLORD: TENANT:
TRIZECHAHN TOWER THREE GALLERIA HENCIE CONSULTING SERVICES, INC.,
MANAGEMENT, L.P., a limited partnership a Texas corporation
By: Trizec Realty, Inc., a California By: /s/ Adil Khan
corporation, as general partner Name: Adil Khan
Title: President
By: /s/ Paul H. Layne
Paul H. Layne, Vice President
By: /s/ Steven M. Lukingbeal
Steven M. Lukingbeal, Assistant Secretary
EXHIBIT A
FLOORPLAN
Exhibit 10.2
CONTINUING LEASE GUARANTY
In consideration of the making of that certain First Amendment To Office
Lease dated of even date herewith (the "First Amendment") between TRIZECHAHN
TOWER THREE GALLERIA MANAGEMENT, L.P. ("Landlord") and HENCIE CONSULTING
SERVICES, INC., a Texas corporation ("Tenant") and in reaffirming the Office
Lease Agreement (the "Lease") covering certain space in Three Galleria Tower,
located at 13155 Noel Road, Dallas, Texas, and for the purpose of inducing
Landlord to enter into and make the First Amendment, the undersigned hereby
unconditionally guarantees the full and prompt payment of Rent (as defined in
the Lease, as amended by the First Amendment) and all other sums required to
be paid by Tenant under the Lease (including without limitation all Rent
payable with respect to the initial leased Premises and all expansion space),
and in the Promissory Note in the amount of $100,000.00 of the same date
entered into by Tenant for the benefit of Landlord (the "Guaranteed
Payments") and the full and faithful performance of all terms, conditions,
covenants, obligations and agreements contained in the Lease on the Tenant's
part to be performed (the "Guaranteed Obligations") and the undersigned
further promises to pay all of Landlord's costs and expenses (including
reasonable attorneys' fees) incurred in endeavoring to collect the Guaranteed
Payments or to enforce the Guaranteed Obligations or incurred in enforcing
this Guaranty as well as all damages which Landlord may suffer in consequence
of any default or breach under the Lease or this Guaranty.
1. Landlord may at any time and from time to time, without notice to or
consent by the undersigned, take any or all of the following actions without
affecting or impairing the liability and obligations of the undersigned on
this Guaranty:
(a) grant an extension or extensions of time for payment of any
Guaranteed Payment or time for performance of any Guaranteed Obligation;
(b) grant an indulgence or indulgences in any Guaranteed Payment or in
the performance of any Guaranteed Obligation;
(c) modify or amend the Lease or any term thereof or any obligation of
Tenant arising thereunder;
(d) consent to any assignment or assignments, sublease or subleases and
successive assignments or subleases by Tenant;
(e) consent to an extension or extensions of the term of the Lease;
(f) accept other guarantors; and/or
(g) release any person primarily or secondarily liable hereunder or
under the Lease or under any other guaranty of the Lease.
The liability of the undersigned under this Guaranty shall not be affected or
impaired by any failure or delay by Landlord in enforcing any Guaranteed
Payment or Guaranteed Obligation or this Guaranty or any security therefor or
in exercising any right or power in respect thereto, or by any compromise,
waiver, settlement, change, subordination, modification or disposition of any
Guaranteed Payment or Guaranteed Obligation or of any security therefor. In
order to hold the undersigned liable hereunder, there shall be no obligation
on the part of Landlord, at any time, to resort for payment to Tenant or to
any other guaranty or to any security or other rights and remedies, and
Landlord shall have the right to enforce this Guaranty irrespective of
whether or not other proceedings or actions are pending or being taken
seeking resort to or realization upon or from any of the foregoing.
2. The undersigned waives all diligence in collection or in protection of
any security, presentment, protest, demand, notice of dishonor or default,
notice of acceptance of this Guaranty, notice of any extensions granted or
other action taken in reliance hereon and all demands and notices of any kind
in connection with this Guaranty or any Guaranteed Payment or Guaranteed
Obligation.
3. The undersigned hereby acknowledges full and complete notice and
knowledge of all the terms, conditions, covenants, obligations and agreements
of the Lease.
4. The payment by the undersigned of any amount pursuant to this Guaranty
shall not in any way entitle the undersigned to any right, title or interest
(whether by subrogation or otherwise) of Tenant under the Lease or to any
security being held for any Guaranteed Payment or Guaranteed Obligation.
5. This Guaranty shall be continuing, absolute and unconditional and remain
in full force and effect until all Guaranteed Payments are made, all
Guaranteed Obligations are performed and all obligations of the undersigned
under this Guaranty are fulfilled.
6. This Guaranty also shall bind the heirs, personal representatives,
successors and assigns of the undersigned and shall inure to the benefit of
Landlord, its successors and assigns.
7. This Guaranty shall be construed according to the laws of the State of
Texas and shall be performed in the county in the first paragraph of this
Guaranty. The situs for the resolutions (including any judicial proceedings)
of any disputes arising under or relating to this Guaranty shall be the
county referenced in the first paragraph of this Guaranty.
8. If this Guaranty is executed by more than one (1) person, all singular
nouns and verbs herein relating to the undersigned shall include the plural
number, the obligations of the several guarantors shall be joint and several
and Landlord may enforce this Guaranty against any one (1) or more guarantors
without joinder of any other guarantor hereunder.
9. Landlord and the undersigned intend and believe that each provision of
this Guaranty comports with all applicable law. However, if any provision of
this Guaranty is found by a court to be invalid for any reason, the remainder
of this Guaranty shall continue in full force and effect and the invalid
provision shall be construed as if it were not contained herein.
10. Each of the undersigned agree that he or she will obtain and deliver to
Landlord annual Financial Statements within thirty (30) days after each one
year anniversary of the date of his or her Financial Statements most recently
provided to Landlord. All such Financial Statements shall be true, correct,
and complete in all material respects, and there shall have been no material
change of the undersigned's financial condition from the financial condition
indicated in such Financial Statements. The term "Financial Statements"
shall mean, for each of the undersigned, a balance sheet, statements of
amount and sources of contingent liabilities, sources and uses of cash and
liquidity verification and, unless Landlord otherwise consents, Financial
Statements for each entity owned or jointly owned thereby. All Financial
Statements shall be in form and detail satisfactory to Landlord and shall
contain or be attached to the signed and dated written certification of the
undersigned in form specified by Landlord to certify that the Financial
Statements constitute a true and correct statement of such party's financial
position. All Financial Statements shall be audited and certified, without
any qualification or exception not acceptable to Landlord, by independent
certified public accountants acceptable to Landlord, and shall contain all
reports and disclosures required by generally accepted accounting principles
for a fair presentation.
[The remainder of this page is intentionally blank]
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Guaranty to Landlord in Dallas, Dallas County, Texas this 25th day of June,
2003.
GUARANTOR
ALTERNATE MARKETING NETWORKS,
INC., a Michigan corporation
By: /s/ Phillip D. Miller
Name: Phillip D. Miller
Title: President
NATIONAL HOME DELIVERY, INC.,
an Illinois corporation
By: /s/ Phillip D. Miller
Name: Phillip D. Miller
Title: President
ALTERNATE POSTAL DIRECT, INC.,
a Michigan corporation
By: /s/ Phillip D. Miller
Name: Phillip D. Miller
Title: President
Exhibit 10.3
AMENDED AND RESTATED
CONTINUING LEASE GUARANTY
In consideration of the making of that certain First Amendment To Office
Lease dated of even date herewith (the "First Amendment") between TRIZECHAHN
TOWER THREE GALLERIA MANAGEMENT, L.P. ("Landlord") and HENCIE CONSULTING
SERVICES, INC., a Texas corporation ("Tenant") and in reaffirming the Office
Lease Agreement (the "Lease") covering certain space in Three Galleria Tower,
located at 13155 Noel Road, Dallas, Texas, and for the purpose of inducing
Landlord to enter into and make the First Amendment, the undersigned hereby
unconditionally guarantees the full and prompt payment of Rent (as defined in
the Lease, as amended by the First Amendment) and all other sums required to be
paid by Tenant under the Lease (including without limitation all Rent payable
with respect to the initial leased Premises and all expansion space) (the
"Guaranteed Payments") and the full and faithful performance of all terms,
conditions, covenants, obligations and agreements contained in the Lease on
the Tenant's part to be performed (the "Guaranteed Obligations") and the
undersigned further promises to pay all of Landlord's costs and expenses
(including reasonable attorneys' fees) incurred in endeavoring to collect the
Guaranteed Payments or to enforce the Guaranteed Obligations or incurred in
enforcing this Guaranty as well as all damages which Landlord may suffer in
consequence of any default or breach under the Lease or this Guaranty.
1. Landlord may at any time and from time to time, without notice to or
consent by the undersigned, take any or all of the following actions without
affecting or impairing the liability and obligations of the undersigned on
this Guaranty:
(a) grant an extension or extensions of time for payment of any
Guaranteed Payment or time for performance of any Guaranteed Obligation;
(b) grant an indulgence or indulgences in any Guaranteed Payment or in
the performance of any Guaranteed Obligation;
(c) modify or amend the Lease or any term thereof or any obligation of
Tenant arising thereunder;
(d) consent to any assignment or assignments, sublease or subleases and
successive assignments or subleases by Tenant;
(e) consent to an extension or extensions of the term of the Lease;
(f) accept other guarantors; and/or
(g) release any person primarily or secondarily liable hereunder or under
the Lease or under any other guaranty of the Lease.
The liability of the undersigned under this Guaranty shall not be affected or
impaired by any failure or delay by Landlord in enforcing any Guaranteed
Payment or Guaranteed Obligation or this Guaranty or any security therefor or
in exercising any right or power in respect thereto, or by any compromise,
waiver, settlement, change, subordination, modification or disposition of any
Guaranteed Payment or Guaranteed Obligation or of any security therefor. In
order to hold the undersigned liable hereunder, there shall be no obligation
on the part of Landlord, at any time, to resort for payment to Tenant or to
any other guaranty or to any security or other rights and remedies, and
Landlord shall have the right to enforce this Guaranty irrespective of whether
or not other proceedings or actions are pending or being taken seeking resort
to or realization upon or from any of the foregoing.
2. The undersigned waives all diligence in collection or in protection of any
security, presentment, protest, demand, notice of dishonor or default, notice
of acceptance of this Guaranty, notice of any extensions granted or other
action taken in reliance hereon and all demands and notices of any kind in
connection with this Guaranty or any Guaranteed Payment or Guaranteed
Obligation.
3. The undersigned hereby acknowledges full and complete notice and knowledge
of all the terms, conditions, covenants, obligations and agreements of the
Lease.
4. The payment by the undersigned of any amount pursuant to this Guaranty
shall not in any way entitle the undersigned to any right, title or interest
(whether by subrogation or otherwise) of Tenant under the Lease or to any
security being held for any Guaranteed Payment or Guaranteed Obligation.
5. This Guaranty shall be continuing, absolute and unconditional and remain
in full force and effect until all Guaranteed Payments are made, all
Guaranteed Obligations are performed and all obligations of the undersigned
under this Guaranty are fulfilled.
6. This Guaranty also shall bind the heirs, personal representatives,
successors and assigns of the undersigned and shall inure to the benefit of
Landlord, its successors and assigns.
7. This Guaranty shall be construed according to the laws of the State of
Texas and shall be performed in the county in the first paragraph of this
Guaranty. The situs for the resolutions (including any judicial proceedings)
of any disputes arising under or relating to this Guaranty shall be the county
referenced in the first paragraph of this Guaranty.
8. If this Guaranty is executed by more than one (1) person, all singular
nouns and verbs herein relating to the undersigned shall include the plural
number, the obligations of the several guarantors shall be joint and several
and Landlord may enforce this Guaranty against any one (1) or more guarantors
without joinder of any other guarantor hereunder.
9. Landlord and the undersigned intend and believe that each provision of
this Guaranty comports with all applicable law. However, if any provision of
this Guaranty is found by a court to be invalid for any reason, the remainder
of this Guaranty shall continue in full force and effect and the invalid
provision shall be construed as if it were not contained herein.
10. Each of the undersigned agree that he or she will obtain and deliver to
Landlord annual Financial Statements within thirty (30) days after each one
year anniversary of the date of his or her Financial Statements most recently
provided to Landlord. All such Financial Statements shall be true, correct,
and complete in all material respects, and there shall have been no material
change of the undersigned's financial condition from the financial condition
indicated in such Financial Statements. The term "Financial Statements" shall
mean, for each of the undersigned, a balance sheet, statements of amount and
sources of contingent liabilities, sources and uses of cash and liquidity
verification and, unless Landlord otherwise consents, Financial Statements for
each entity owned or jointly owned thereby. All Financial Statements shall be
in form and detail satisfactory to Landlord and shall contain or be attached
to the signed and dated written certification of the undersigned in form
specified by Landlord to certify that the Financial Statements constitute a
true and correct statement of such party's financial position. All Financial
Statements shall be audited and certified, without any qualification or
exception not acceptable to Landlord, by independent certified public
accountants acceptable to Landlord, and shall contain all reports and
disclosures required by generally accepted accounting principles for a fair
presentation.
11. Notwithstanding anything to the contrary contained in this Continuing
Lease Guaranty, the collective as to the Guaranteed Obligations shall be
limited to $75,000.00.
12. Guarantor hereby represents that he executed the Continuing Lease Guaranty
as "Adil Rasheed" and hereby acknowledges that Guarantor and Adil Rasheed are
one and the same individual.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Guaranty to Landlord in Dallas, Dallas County, Texas this 2nd day of June 2003.
GUARANTOR
/s/ Adil Khan
ADIL KAHN, an individual
Address:
Social Security #: 233-27-4747
(Attach copy of current Drivers License)
Exhibit 10.4
PROMISSORY NOTE
$100,000.00 May 30, 2003
FOR VALUE RECEIVED, on or before December 31, 2004 ("Maturity Date"), the
undersigned (hereinafter referred to as "Maker"), promises to pay to the order
of TRIZECHAHN TOWER THREE GALLERIA MANAGEMENT, LP, a limited partnership
("Payee") at 13455 Noel Road, Suite 2300, Dallas, Texas 75240; Attn: Property
Manager, the principal amount of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00) ("Total Principal Amount"), together with interest on
outstanding balance of the Total Principal Amount from the date hereof until
paid at a rate per annum equal to the lesser of (a) the Maximum Rate (as
hereinafter defined) or (b) ten percent (10%) per annum, calculated on the
basis of actual days elapsed but computed as if each year consisted of 360
days.
The term "Maximum Rate," as used herein, shall mean at the particular
time in question the maximum rate of interest which, under applicable law, may
then be charged on this Note. If such maximum rate of interest changes after
the date hereof and this Note provides for a fluctuating rate of interest, the
Maximum Rate shall be automatically increased or decreased, as the case may
be, without notice to Maker from time to time as of the effective date of each
change in such maximum rate. If applicable law ceases to provide for such a
maximum rate of interest, the Maximum Rate shall be equal to eighteen percent
(18%) per annum.
The principal of and all accrued but unpaid interest on this Note shall
be due and payable as follows:
(a) Commencing on July 1, 2003, and continuing on the first (1st) day of
each calendar month thereafter until and including November 1, 2003, Maker
shall make a payment of principal and interest in the amount of $10,000.00 and
thereafter Maker shall pay to Payee a payment of principal and interest in the
amount of $5,000.00 on the first (1st) day of each calendar month thereafter
until all accrued but unpaid interest, as calculated as provided herein, and
principal are repaid in full.
(b) The outstanding principal balance of this Note, together with all
accrued but unpaid interest, shall be due and payable in full on the Maturity
Date.
To the extent that any interest is not paid on or before the date same
comes due and payable, Payee may, at its option, add such accrued interest to
the principal of this Note. Notwithstanding anything herein to the contrary,
upon an Event of Default (as hereinafter defined) or at maturity, whether by
acceleration or otherwise, all principal of this Note shall, at the option of
Payee, bear interest at the Maximum Rate until paid.
Maker may from time to time prepay all or any portion of the principal of
this Note without premium or penalty. All regularly scheduled payments of the
indebtedness evidenced by this Note and by any of the other Credit Documents
(as hereinafter defined) shall be applied first to any accrued but unpaid
interest then due and payable hereunder or thereunder and then to the
principal amount then due and payable. All non-regularly scheduled payments
shall be applied to such indebtedness in such order and manner as the holder
of this Note may from time to time determine in its sole discretion. All
payments and prepayments of principal of or interest on this Note shall be
made in lawful money of the United States of America in immediately available
funds, at the address of Payee indicated above, or such other place as the
holder of this Note shall designate in writing to Maker. If any payment of
principal of or interest on this Note shall become due on a day which is not a
Business Day (as hereinafter defined), such payment shall be made on the next
succeeding Business Day and any such extension of time shall be included in
computing interest in connection with such payment. As used herein, the term
"Business Day" shall mean any day other than a Saturday, Sunday or any other
day on which national banking associations are authorized to be closed. The
books and records of Payee shall be prima facie evidence of all outstanding
principal of and accrued and unpaid interest on this Note.
This Note, that certain First Amendment to Office Lease Agreement dated
May 29, 2003 between Maker (or its subsidiary) and Payee (the "First
Amendment"), and all other documents evidencing, securing, governing and/or
pertaining to this Note, are hereinafter collectively referred to as the
"Credit Documents." The holder of this Note is entitled to the benefits and
security provided in the Credit Documents. This Note is the "Note" provided
for in the First Amendment.
Maker agrees that this Note is not for personal, family or household
purposes, and that is solely for business, commercial, investment, or other
similar purposes.
Maker agrees that upon the occurrence of any one or more of the following
events of default ("Event of Default"):
(a) failure of Maker to pay any installment of principal of or interest
on this Note or on any other indebtedness of Maker to Payee when due; or
(b) Maker's failure to make any required payment under its lease, as
amended by the First Amendment or the occurrence of any default by Maker
thereunder; or
(c) the bankruptcy or insolvency of, the assignment for the benefit of
creditors by, or the appointment of a receiver for any of the property of, or
the liquidation, termination, dissolution or death or legal incapacity of, any
party liable for the payment of this Note, whether as maker, endorser,
guarantor, surety or otherwise;
the holder of this Note may, at its option, without further notice or demand,
(i) declare the outstanding principal balance of and accrued but unpaid
interest on this Note at once due and payable, (ii) foreclose any liens
securing payment hereof, (iii) pursue any and all other rights, remedies and
recourses available to the holder hereof, including but not limited to any
such rights, remedies or recourses under the Credit Documents, at law or in
equity, or (iv) pursue any combination of the foregoing.
The failure to exercise the option to accelerate the maturity of this
Note or any other right, remedy or recourse available to the holder hereof
upon the occurrence of an Event of Default hereunder shall not constitute a
waiver of the right of the holder of this Note to exercise the same at that
time or at any subsequent time with respect to such Event of Default or any
other Event of Default. The rights, remedies and recourses of the holder
hereof, as provided in this Note and in any of the other Credit Documents or
the New Lease, shall be cumulative and concurrent and may be pursued
separately, successively or together as often as occasion therefore shall
arise, at the sole discretion of the holder hereof. The acceptance by the
holder hereof of any payment under this Note which is less than the payment in
full of all amounts due and payable at the time of such payment shall not (i)
constitute a waiver of or impair, reduce, release or extinguish any right,
remedy or recourse of the holder hereof, or nullify any prior exercise of any
such right, remedy or recourse, or (ii) impair, reduce, release or extinguish
the obligations of any party liable under any of the Credit Documents or the
New Lease as originally provided herein or therein.
This Note and all of the other Credit Documents are intended to be
performed in accordance with, and only to the extent permitted by, all
applicable usury laws. If any provision hereof or of any of the other Credit
Documents or the application thereof to any person or circumstance shall, for
any reason and to any extent, be invalid or unenforceable, neither the
application of such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained shall be
affected thereby and shall be enforced to the greatest extent permitted by
law. It is expressly stipulated and agreed to be the intent of the holder
hereof to at all times comply with the usury and other applicable laws now or
hereafter governing the interest payable on the indebtedness evidenced by this
Note. If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Credit Documents, or contracted for, charged, taken,
reserved or received with respect to the indebtedness evidenced by this Note,
or if Payee's exercise of the option to accelerate the maturity of this Note,
or if any prepayment by Maker results in Maker having paid any interest in
excess of that permitted by law, then it is the express intent of Maker and
Payee that all excess amounts theretofore collected by Payee be credited on
the principal balance of this Note (or, if this Note and all other
indebtedness arising under or pursuant to the other Credit Documents have been
paid in full, refunded to Maker), and the provisions of this Note and the
other Credit Documents immediately be deemed reformed and the amounts
thereafter collectable hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder or thereunder. All sums paid, or agreed to be
paid, by Maker for the use, forbearance, detention, taking, charging,
receiving or reserving of the indebtedness of Maker to Payee under this Note
or arising under or pursuant to the other Credit Documents shall, to the
maximum extent permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full term of such indebtedness until payment in full
so that the rate or amount of interest on account of such indebtedness does
not exceed the usury ceiling from time to time in effect and applicable to
such indebtedness for so long as such indebtedness is outstanding. To the
extent federal law permits Payee to contract for, charge or receive a greater
amount of interest, Payee will rely on federal law instead of Chapter 303 of
the Texas Finance Code, as amended, for the purpose of determining the Maximum
Rate. Additionally, to the maximum extent permitted by applicable law now or
hereafter in effect, Payee may, at its option and from time to time, implement
any other method of computing the Maximum Rate under such Chapter 303, as
amended, or under other applicable law by giving notice, if required, to Maker
as provided by applicable law now or hereafter in effect. Notwithstanding
anything to the contrary contained herein or in any of the other Credit
Documents, it is not the intention of Payee to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
In no event shall Chapter 346 of the Texas Finance Code (which regulates
certain revolving loan accounts and revolving tri-party accounts) apply to
this Note. To the extent that Chapter 303 of the Texas Finance Code, as
amended, is applicable to this Note, the "weekly ceiling" specified in such
chapter is the applicable ceiling; provided that, if any applicable law
permits greater interest, the law permitting the greatest interest shall apply.
If this Note is placed in the hands of an attorney for collection, or is
collected in whole or in part by suit or through probate, bankruptcy or other
legal proceedings of any kind, Maker agrees to pay, in addition to all other
sums payable hereunder, all costs and expenses of collection, including but
not limited to reasonable attorneys' fees.
Maker and any and all endorsers and guarantors of this Note severally
waive presentment for payment, notice of nonpayment, protest, demand, notice
of protest, notice of intent to accelerate, notice of acceleration and
dishonor, diligence in enforcement and indulgences of every kind and without
further notice hereby agree to renewals, extensions, exchanges or releases of
collateral, taking of additional collateral, indulgences or partial payments,
either before or after maturity.
THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT AS SUCH LAWS ARE
PREEMPTED BY APPLICABLE FEDERAL LAWS.
THIS NOTE AND THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
MAKER:
HENCIE CONSULTING SERVICES, INC.,
a Texas corporation
By: /s/ Adil Khan
Name: Adil Khan
Title: President
21