PAYOFF, AMENDMENT AND SETTLEMENT AGREEMENT
Exhibit
4.6
This
Payoff, Amendment and Settlement Agreement (the “Agreement”) is made and entered
into as of June 30, 2009, by and between Medialink Worldwide Incorporated, a
Delaware corporation (the “Company”) and the
undersigned holder (the “Holder”) of the Company’s Variable Rate Convertible
Debenture, as amended, due June 30, 2010 (the
“Debenture”). Capitalized terms used but not defined herein have the
same meanings ascribed to them in the Purchase Agreement (defined below), the
Amendment (defined below), the Warrants (as defined below), or the
Debenture.
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated as of November 8,
2004 (the “Purchase Agreement”), among the Company, the Holder and the other
holders of the Debentures (collectively with the Holder, the “Holders”), the
Company issued to the Holders Debentures in the aggregate principal amount of $5
million and warrants to purchase the Company’s common stock (the “Warrants”);
and
WHEREAS,
on October 6, 2008, the Holders and the Company entered into an Amendment and
Waiver Agreement (the “Amendment”) pursuant to which, among other things, (i)
the Company prepaid interest through January 9, 2010 (the “Prepaid Interest”);
(ii) the maturity of the Debentures was extended to June 30, 2010; and (iii) the
Company executed and delivered a security agreement (the “Security Agreement”)
to the Holders wherein it granted each Holder a first lien security interest in
all of the Company’s assets theretofore and thereafter received to secure the
Company’s obligations under the Debentures; and
WHEREAS,
the Company wishes to pay off and retire the Debentures on the terms and
conditions herein, to amend the Warrants that were issued to the Holders
pursuant to the Purchase Agreement, and to have the Holders release their liens
on the collateral under the Security Agreement.
NOW THEREFORE, in consideration of the
terms contained in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which is acknowledged, the parties, intending to be legally
bound, agree as follows:
Section
1. The Payoff
Amount
The
Company shall pay to each Holder the Amount listed on Schedule A under each
Holder’s name as a Final Payment of its Debenture (the “Payoff
Amount”). Upon receipt of the Payoff Amount, each Holder shall return
its original Debenture to the Company and the obligations contained therein
shall thereafter be extinguished.
Section
2. Pre-paid
Interest
In
consideration for the Holders agreeing to retire the Debentures, in addition to
the receipt of the Payoff Amount as per Section 1 above, the Holders are
entitled to keep the Prepaid Interest payment that was made in connection with
the Amendment and which was meant to cover interest for the 15 month period
subsequent to the Permitted Prepayment Date.
Section
3. Security
Agreement
Upon
receipt of the Payoff Amount referenced in Section 1 above, the Security
Agreement shall be terminated and the Holders will cooperate with the Company to
the extent necessary to have the liens on the Collateral pledged thereunder
released.
Section
4. The
Warrant
The
Holders and the Company agree to amend Section 3(f) of the Warrants by replacing
it in its entirety with the following:
Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a
“Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2(e) on the exercise of this Warrant). For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this Warrant and
the other Transaction Documents in accordance with the provisions of this
Section 3(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the
holder of this Warrant, deliver to the Holder in exchange for this Warrant a
security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a
corresponding number of shares of capital stock of such Successor Entity (or its
parent entity) equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of
Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this
Warrant immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had
been named as the Company herein. The provisions of this paragraph shall
apply similarly and equally to successive Fundamental Transactions and shall be
applied as if this Warrant (and any such subsequent warrants) were fully
exercisable and without regard to any limitations on the exercise of this
Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Beneficial Ownership Limitation, applied however, with respect to shares
of capital stock registered under the Exchange Act and thereafter receivable
upon exercise of this Warrant (or any such other warrant)).
Notwithstanding
anything to the contrary herein, in the event of a Fundamental Transaction that
is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in
Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving a
person or entity not traded on a national securities exchange, including, but
not limited to, the Nasdaq Global Select Market, the Nasdaq Global Market, or
the Nasdaq Capital Market, this Warrant shall upon the consummation of the
Fundamental Transaction, be cacnelled and converted into a right to receive from
the Company or any Successor Entity (as definded below) an amount of cash equal
to the Black Scholes Value of the remaining unexercised portion of this Warrant
on the date of the consummation of such Fundamental Transaction. “Black-Scholes Value”
means the value of this Warrant based on the Black- Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to 206% (C) if
applicable, the underlying price per share used in such calculation shall be the
sum of the price per share being offered in cash, if any, plus the value of any
non-cash consideration, if any, being offered in such Fundamental Transaction
and (D) a remaining option time equal to the time between the consummation date
of the applicable Fundamental Transaction and the Termination Date. Such
payment will be made upon receipt from the Holder of the Warrant together with a
letter of transmittal or other documentation required by the Company or the
Successor Entity and
will be made no later than the later of (i) ten (10) business days after the
consummation date of the applicable Fundamental Transaction and (ii) the receipt
of the aforementioned documents.
Section
5. Representations and
Warranties of the Company. The Company hereby makes the
representations and warranties set forth below to the Holder as of the date of
its execution of this Agreement:
(a) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized by
all necessary action on the part of the Company and no further action is
required by the Company, its board of directors or its stockholders in
connection therewith. This Agreement has been duly executed by the
Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
3
(b) No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate of incorporation, bylaws or other
organizational or charter documents; or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company in connection with, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any material agreement, credit facility, debt or
other material instrument (evidencing Company debt or otherwise) or other
material understanding to which the Company is a party or by which any property
or assets of the Company is bound or affected; or (iii) conflict with or result
in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company
is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected.
(c) Equal
Consideration. Except as set forth in this Agreement, no
consideration has been offered or paid to any person to amend or consent to a
waiver, modification, forbearance or otherwise of any provision of any of the
Transaction Documents.
(d) Affirmation of Prior
Representations and Warranties. Except as set forth in the SEC
Reports, the Company hereby represents and warrants to the Holder that the
Company’s representations and warranties set forth in each of the documents
executed by the Company in connection with the Transaction Documents, as
amended, are true and correct as of the date hereof.
Section
6. Representations and
Warranties of the Holder. The Holder hereby makes the representations and
warranties set forth below to the Company as of the date of its execution of
this Agreement. The Holder represents and warrants that (a) the execution and
delivery of this Agreement by it and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on its
behalf and (b) this Agreement has been duly executed and delivered by the Holder
and constitutes the valid and binding obligation of the Holder, enforceable
against it in accordance with its terms except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
4
Section
7. Public
Disclosure. The Company shall, as soon as practical and, in
any event, within 4 Trading Days of the Effective Date, issue a Current Report
on Form 8-K, reasonably acceptable to the Holder, disclosing the material terms
of the transactions contemplated hereby and attaching this Agreement as an
exhibit thereto. The Company shall consult with the Holder in issuing
any other press releases with respect to the transactions contemplated
hereby.
Section
8. Effect on Transaction
Documents. Except as expressly set forth above, all of the
terms and conditions of the Transaction Documents shall continue in full force
and effect after the execution of this Agreement and shall not be in any way
changed or modified by the terms set forth herein, including, but not limited
to, any other obligations the Company may have to the Holder under the
Transaction Documents. Notwithstanding the
foregoing, this Agreement shall be deemed for all purposes as an amendment to
any Transaction Document as required to serve the purposes hereof, and in the
event of any conflict between the terms and provisions of any other Transaction
Document, on the one hand, and the terms and provisions of this Agreement, on
the other hand, the terms and provisions of this Agreement shall
prevail.
Section
9. Amendments and
Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the
Holder. An e-mail intending to modify or amend this Agreement shall
not be binding upon the parties hereto.
Section
10. Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be delivered as set forth in the Purchase
Agreement.
Section
11. Survival. All
warranties and representations (as of the date such warranties and
representations were made) made herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by the parties hereto and shall survive for the applicable
statute of limitations.
Section
12. Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties hereto;
provided, however, that no
party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties
hereto.
Section
13. Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature 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.
Section
14. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision of the Purchase Agreement.
Section
15. Severability. If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5
Section
16. Construction. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement 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.
Section
17. Entire
Agreement. The Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
Section
18. Independent Nature of
Holder’s Obligations and Rights. The obligations of the Holder
hereunder are several and not joint with the obligations of any other Holders
executing similar agreements, and no Holder shall be responsible in any way for
the performance of the obligations of any other Holder. Nothing contained herein
or in any other agreement or document delivered at any closing, and no action
taken by the Holder pursuant hereto, shall be deemed to constitute the Holder
with the other Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. The Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.
Section
19. Legal
Fees. Simultaneous with the payment of the Payoff Amount, the
Company shall pay Iroquois Capital Management $10,000 for legal
fees.
[SIGNATURE
PAGE FOLLOWS]
*********************
6
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their proper and duly authorized officers as of the day and year
first above written.
COMPANY:
| MEDIALINK WORLDWIDE INCORPORATED | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
HOLDER:
|
|
Name of Holder:
|
||
| Signature of Authorized Signatory of Holder: | |||
| Name of Authorized Signatory: | |||
| Title of Authorized Signatory: | |||
7
Schedule
A
|
Holder
|
Payoff Amount
|
|||
|
Iroquois
Capital, LP
|
$ | 731,034.48 | ||
|
Smithfield
Fiduciary LLC
|
$ | 310,689.66 | ||
|
Xxxxxxxx
Capital, LLC
|
$ | 173,675.52 | ||
|
Portside
Growth and Opportunity Fund
|
$ | 374,600.34 | ||
|
Total
|
$ | 1,590,000.00 | ||
