SECOND AMENDMENT TO SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.2
EXECUTION
VERSION
SECOND
AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This
SECOND
AMENDMENT TO SECURITIES PURCHASE AGREEMENT
(this
“Amendment”),
effective as of January 4, 2008 (the “Effective
Date”),
is by
and among Customer Acquisition Network Holdings, Inc., a Delaware corporation
(the “Company”),
Longview Marquis Master Fund, L.P., a British Virgin Islands limited partnership
and Alpha Capital Anstalt, a Liechtenstein corporation (each, a “Buyer”
and,
collectively, the “Buyers”).
Capitalized terms used in this Amendment but not defined herein have the meaning
set forth in the SPA (as defined below).
WHEREAS,
the
Company and the Buyers entered into (a) that certain Securities Purchase
Agreement (as amended, restated, supplemented or otherwise modified and in
effect from time to time, the “SPA”),
dated
as of November 15, 2007, in which the Company has agreed to sell the Notes
to
each of the Buyers, and (b) that certain First Amendment to Securities Purchase
Agreement (the “First
Amendment”),
effective as of November 30, 2007, pursuant to which the Company and the Buyers
agreed to amend certain SPA provisions related to the Company’s deposit
accounts; and
WHEREAS,
pursuant to the terms of this Amendment, the Company and the Buyers desire
to
further amend the SPA provisions related to the Company’s deposit
accounts.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein, in
the
First Amendment and in the SPA, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each of the
parties hereto, intending to be legally bound, hereby agrees as
follows:
1. Amendments
to SPA.
(a) Section
4(v) of the SPA is hereby amended and restated to read in its entirety as
follows:
“v. The
Company shall transfer all funds on deposit in each Excluded Account on a daily
basis to one or more deposit account(s) that are subject to an Account Control
Agreement to which the Collateral Agent is a party and which is in form and
substance satisfactory to the Collateral Agent; provided, however, that the
Company may hold (i) not more than $194,000 in the account described in clause
(i) of the definition of the term Excluded Accounts at any time during the
period commencing on the Closing Date and ending on the forty-fifth (45th)
day
after the Closing Date, (ii) not more than $303,326 in the account described
in
clause (ii) of the definition of the term Excluded Accounts at any time during
the period commencing on the Closing Date and ending on the forty-fifth (45th)
day after the Closing Date, (iii) not more than $100 in the account described
in
clause (iii) of the definition of Excluded Accounts (the “Savings
Account”)
at any
time during the period commencing on the Closing Date and ending on the tenth
(10th) day after the Closing Date and (iv) not more than $40,000 in the account
described in clause (iv) of the definition of Excluded Accounts at any time
during the period commencing on January 4, 2008 and ending on January 24, 2008.
The Company shall deliver, or cause to be delivered, to the Collateral Agent
on
or prior to the forty-fifth (45th) day after the Closing Date evidence of the
closing of the Excluded Accounts described in clauses (i) and (ii) above, in
form and substance satisfactory to the Collateral Agent, and transfer all funds
on deposit in such Excluded Accounts to one or more deposit account(s) that
are
subject to an Account Control Agreement to which the Collateral Agent is a
party
and which is in form and substance satisfactory to the Collateral Agent. The
Company shall deliver, or cause to be delivered, to the Collateral Agent on
or
prior to the tenth (10th) day after the Closing Date evidence of the closing
of
the Savings Account, in form and substance satisfactory to the Collateral Agent,
and transfer all funds on deposit in the Savings Account to one or more deposit
account(s) that are subject to an Account Control Agreement to which the
Collateral Agent is a party and which is in form and substance satisfactory
to
the Collateral Agent. The Company shall deliver, or cause to be delivered,
to
the Collateral Agent on or prior to January 24, 2008 evidence of the closing
of
the Excluded Account described in clause (iv) above, in form and substance
satisfactory to the Collateral Agent, and transfer all funds on deposit in
such
Excluded Account to one or more deposit account(s) that are subject to an
Account Control Agreement to which the Collateral Agent is a party and which
is
in form and substance satisfactory to the Collateral Agent. Following the
closing the Excluded Accounts, no funds of the Company or any of its
Subsidiaries shall be held in any accounts other than accounts that are not
Excluded Accounts and that are covered by Account Control
Agreements.”
(b) Section
4(w) of the SPA is hereby amended and restated to read in its entirety as
follows:
“w. The
Company shall not, and shall cause each of the Subsidiaries to not, direct
any
customer, client or remitter of funds to the Company or any of the Subsidiaries
to remit payments to any Excluded Account after the Closing Date.”
(c) Section
5(g) of the SPA is hereby amended to add the following subsection at the end
thereof:
“(vi)
incur
the
obligation to pay the Options Earnout pursuant to the Options Merger
Agreement.”
(d) The
definition of “Excluded Account” in the Appendix to the SPA is hereby amended
and restated to read in its entirety as follows:
“‘Excluded
Accounts’
means
(i) account number 009484493016 in the name of Desktop Interactive, Inc.
maintained at Bank of America, N.A., (ii) account number 229009782401 in the
name of Desktop Acquisition Sub, Inc. maintained at Bank of America, N.A.,
(iii)
account number 004433333900 in the name of Desktop Acquisition Sub, Inc.
maintained at Bank of America, N.A., and (iv) account number 9081011164 in
the
name of Options Newsletter, Inc. maintained at Colonial Bank.”
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(e) The
definition of “Options Earnout” is hereby added to the Appendix to the SPA as
follows:
“‘Options
Earnout’
means
the payments, not to exceed $1,000,000 in the aggregate, required to be made
by
the Company in accordance with the terms and provisions, and subject to the
conditions, of Section 2.9 of the Options Merger Agreement.”
(f) The
definition of “Options
Merger Agreement”
is
hereby added to the Appendix to the SPA as follows:
“‘Options
Merger Agreement’
means
that certain Agreement and Plan of Merger, dated as of January 4, 2008, among
the Company, Options Acquisition Sub, Inc., a Delaware corporation, Options
Newsletter, Inc., a Florida corporation, and Xxxxx Xxxxxxxx, as such agreement
is in effect on January 4, 2008 (without amendment or modification thereafter)
and attached as Exhibit A to the Second Amendment to Securities Purchase
Agreement, dated as of January 4, 2008, by and among the Company and the
Buyers.”
2. Ratification
and Confirmation of SPA.
The
Company hereby adopts, ratifies and confirms the SPA, as amended by the First
Amendment and by this Amendment, and acknowledges and agrees that the SPA,
as
amended by the First Amendment and by this Amendment, is and remains in full
force and effect. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Buyer under
the SPA or the other Transaction Documents, nor constitute an amendment or
waiver of any other provision of the Transaction Documents. All references
to
the SPA (including any term used to mean the SPA) in any of the Transaction
Documents or in any other document, instrument, agreement or writing shall
hereafter be deemed to refer to the SPA as modified by the First Amendment
and
by this Amendment.
3. Representations
and Warranties of Company.
The
Company hereby represents and warrants to each Buyer that:
(a) Authorization;
Enforcement; Validity.
Each of
the Company and each of its Subsidiaries has the requisite corporate power
and
authority to enter into and perform its obligations under this Amendment, the
SPA (as amended hereby) and each of the other agreements to which it is a party
or by which it is bound and which is entered into or amended by the parties
hereto in connection with the transactions contemplated hereby and thereby
(the
“Other
Amendment Agreements”).
The
execution and delivery of this Amendment and the Other Amendment Agreements,
and
the consummation of the transactions contemplated hereby and thereby, have
been
duly authorized by the respective boards of directors of the Company and each
of
its Subsidiaries, and no further consent or authorization is required by the
Company, any of its Subsidiaries or any of their respective boards of directors
or shareholders. Each of this Amendment and the Other Amendment Agreements
has
been duly executed and delivered by the Company and each of its Subsidiaries
that is a party thereto, and each of the Amendment, the SPA (as amended hereby)
and the Other Amendment Agreements constitutes a valid and binding obligation
of
the Company and each of its Subsidiaries, enforceable against the Company and
each of its Subsidiaries in accordance with its terms.
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(b) No
Conflicts.
The
execution and delivery of this Amendment, the SPA (as amended hereby) and each
of the Other Amendment Agreements by the Company and each of its Subsidiaries,
the performance by the Company and each of its Subsidiaries of their respective
obligations hereunder and thereunder, and the consummation by the Company and
each of its Subsidiaries of the transactions contemplated hereby and thereby,
did not and will not (i) result in a violation of the certificate of
incorporation, bylaws or other organizational documents of the Company or any
of
its Subsidiaries; (ii) conflict with, or constitute a breach or default (or
an
event which, with the giving of notice or lapse of time or both, constitutes
or
would constitute a breach or default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or other remedy with
respect to, any agreement, indenture or instrument to which the Company or
any
of its Subsidiaries is a party; or (iii) result in a violation of any law,
rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or any of its Subsidiaries
or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected. Neither the Company nor any of its Subsidiaries is required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of
its
obligations under, or contemplated by, this Amendment in accordance with the
terms hereof.
(c) Options
Merger Agreement.
Attached hereto as Exhibit A is a true, correct and complete copy of that
certain Agreement and Plan of Merger, dated as of January 4, 2008, among the
Company, Options Acquisition Sub, Inc., a Delaware corporation, Options
Newsletter, Inc., a Florida corporation, and Xxxxx Xxxxxxxx, as entered into
on
the date hereof (the “Options
Merger Agreement”).
4. Representations
and Warranties of Buyers.
Each
Buyer hereby represents and warrants to the Company that (a) such Buyer is
a
validly existing limited partnership or corporation, as applicable, and has
the
requisite partnership or corporate power and authority to enter into and perform
its obligations under this Amendment and (b) this Amendment has been duly and
validly authorized, executed and delivered on behalf of such Buyer and is a
valid and binding agreement of such Buyer, enforceable against such Buyer in
accordance with its terms.
5. Acknowledgement
of the Company.
The
Company hereby irrevocably and unconditionally acknowledges, affirms and
covenants to each Buyer that:
(a) such
Buyer is not in default under any of the Transaction Documents nor otherwise
has
breached any obligations to the Company or any of its Subsidiaries;
and
(b) there
are
no offsets, counterclaims or defenses to the Liabilities (as such term is
defined in the Security Agreement), including the liabilities and obligations
of
the Company under the SPA (as amended hereby), or to the rights, remedies or
powers of such Buyer in respect of any of the Liabilities or any of the
Transaction Documents, and the Company agrees not to interpose (and does hereby
waive and release) any such defense, set-off or counterclaim in any action
brought by such Buyer with respect thereto.
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6. Disclosure
of Transactions and Other Material Information.
On or
prior to 9:00 a.m., New York time, on the fourth Business Day following the
date
hereof, the Company shall file a Form 8-K (the “Form
8-K”)
with
the Securities and Exchange Commission (the “SEC”)
describing this Amendment, the Options Merger Agreement and the transactions
contemplated thereby, providing any other information required to be disclosed
pursuant to the rules and regulations of the SEC, and including as an exhibit
this Amendment and the Options Merger Agreement, in the form required by the
1934 Act. From and after the filing of this Form 8-K with the SEC, no Buyer
shall be in possession of any material nonpublic information received from
the
Company, any of its Subsidiaries or any of their respective officers, directors,
employees, agents or affiliates. The Company shall provide each of the Buyers
with a reasonable opportunity to review and comment upon the Form 8-K prior
to
the filing thereof.
7. Expenses.
In
accordance with Section 4(h) of the SPA, contemporaneously with the execution
and delivery of this Amendment, the Company shall reimburse each of the
Collateral Agent and the Buyers for all of its out-of-pocket fees, costs and
expenses, including attorneys’ fees and expenses, incurred in connection with
the drafting, negotiation and execution of this Amendment.
8. Further
Assurances.
The
Company hereby agrees from time to time, as and when requested by any Buyer,
to
execute and deliver or cause to be executed and delivered, all such documents,
instruments and agreements, including secretary’s certificates, and to take or
cause to be taken such further or other action, as such Buyer may reasonably
deem necessary or desirable in order to carry out the intent and purposes of
this Amendment, the SPA (as amended hereby) and the Other Amendment
Agreements.
9. Rules
of Construction.
All
words in the singular or plural include the singular and plural and pronouns
stated in either the masculine, the feminine or neuter gender shall include
the
masculine, feminine and neuter, and the use of the word “including” in this
Amendment shall be by way of example rather than limitation.
10. No
Strict Construction.
The
language used in this Amendment will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
11. Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Amendment shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of
New York.
12. Entire
Agreement.
The
SPA, as amended by the First Amendment and by this Amendment, and the other
Transaction Documents supersede all other prior oral or written agreements
between each Buyer, the Company, their affiliates and persons acting on their
behalf with respect to the matters discussed herein.
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13. Section
Headings.
The
section headings herein are for convenience of reference only, and shall not
affect in any way the interpretation of any of the provisions
hereof.
14. Counterparts.
This
Amendment may be executed and delivered in one or more counterparts, and by
the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective when
counterparts have been signed by each party hereto and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart. In the event that any signature to this Amendment is delivered
by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing
(or
on whose behalf such signature is executed) with the same force and effect
as if
such facsimile or “.pdf” signature page were an original thereof. No party
hereto shall raise the use of a facsimile machine or e-mail delivery of a “.pdf”
format data file to deliver a signature to this Amendment or the fact that
such
signature was transmitted or communicated through the use of a facsimile machine
or e-mail delivery of a “.pdf” format data file as a defense to the formation or
enforceability of a contract, and each party hereto forever waives any such
defense.
15. Successors.
This
Amendment shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, including any purchasers of the
Securities.
[SIGNATURES
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IN
WITNESS WHEREOF,
the
Company and the Buyers have executed this Amendment as of the Effective
Date.
| COMPANY: | ||
| CUSTOMER ACQUISITION NETWORK HOLDINGS, INC. | ||
| |
|
|
| By: | /S/XXXXX XXXXX | |
| Name: | XXXXX XXXXX | |
| Title: | Chief Operating Officer | |
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| BUYERS: | ||
| LONGVIEW MARQUIS MASTER FUND, L.P., | ||
| a British Virgin Islands limited partnership | ||
| |
|
|
| By: | Viking Asset Management, LLC | |
| Its: | Investment Advisor | |
| By: | /S/ S. Xxxxxxx Xxxxxxx | |
| Name: | S. Xxxxxxx Xxxxxxx | |
| Title: | Chief Financial Officer and Managing Member | |
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| ALPHA CAPITAL ANSTALT, a Liechtenstein corporation | ||
| |
|
|
| By: | ||
| Name: | Xxxxxx Xxxxxxxx | |
| Title: | Director | |
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