MODIFICATION AGREEMENT
MODIFICATION AGREEMENT (this “Agreement”), dated as of September 21 2018, by and among Good Gaming, Inc., a Delaware Corporation (the “Company”) and RedDiamond Partners, Inc. (“RDP”).
WHEREAS, RDP owns an aggregate of 93.062 shares of Series D Preferred Stock (the “Preferred Shares”), each with a stated value of $1,000 per share, which it purchased pursuant to a Securities Purchase Agreement entered into on October 6, 2017 (the “SPA”);
WHEREAS, the Company has an immediate need for a capital infusion for several purposes including but not limited to funds needed to pay its auditors to complete their review of the Company’s financial statements for the quarter ended June 30, 2018 which is necessary to finalize and file the Company’s Form 10-Q for the quarter ended June 30, 2018;
WHEREAS, ViaOne Services, Inc. (“ViaOne”) which the Company is currently indebted to in the amount of $$1,034,399.54, has indicated that they would loan the Company the necessary funds to file the 10-Q and all necessary filings through at least the Company’s 10-K for the year ended December 31, 2018 pursuant to a line of credit (the “LOC”), provided that such funds must come in as loans secured by all of the assets of Good Gaming, Inc. and that the Company must come to terms with certain creditors/holders including RDP to modify certain terms of their arrangement.
WHEREAS, the Company and RDP desire to enter into this Agreement to modify certain terms of the COD and SPA.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to them in the SPA and COD, as amended hereby.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the Company and RDP hereby agree as follows:
1. CONSENT.
RDP hereby consents to the Company entering into a letter of credit with ViaOne which provides that ViaOne shall receive a security interest in all of the assets of the Company to secure new funds advanced under the LOC.
2. MODIFICATION OF COD. – RDP and the Company agree that the terms of the COD are amended as follows:
| (a) | Any and all alleged Events of Default are hereby waived; | |
| (b) | The Volume Failure and Price Failure provisions shall be deleted; | |
| (c) | The Preferred Shares shall convert into Common Stock (the “Conversion Shares”) at the lower of the Fixed Conversion Price ($.06) or at the VWAP which shall be defined as the average of the five (5) lowest closing prices during the 20 days prior to conversion; for the avoidance of doubt, RDP has not waived its right to the Conversion Premium as defined in the COD. |
(d) The Company shall have the obligation to redeem 46.531 of the Preferred Shares (which represents 50% of the Preferred Shares Owned by RDP) at 110% of the Stated Value of $46,531 by making three equal payments of $17,061.37 on October 15, 2018, November 15, 2018 and December 15, 2018.
(e) The Preferred Shares shall not be entitled to a dividend going forward.
3. SALE PROHIBITIONS – RDP agrees that for any of the first three (3) months following the date of this Modification Agreement, it will not sell more than the greater of (i) 33% of the total amount of shares of common stock which would be issuable upon conversion of all Preferred Shares owned by it and (ii) 30% of the total volume of shares of the Common Stock that are traded in the month of conversion unless the Company otherwise consents.
4. REPRESENTATIONS AND WARRANTIES
(a) RDP’s Representations. RDP hereby represents and warrants to the Company:
(i) RDP is either an individual or an entity validly existing and in good standing under the laws of the jurisdiction of its organization.
(ii) This Agreement has been duly authorized, validly executed and delivered by RDP and is a valid and binding agreement and obligation of RDP enforceable against RDP in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and RDP has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and thereunder.
(iii) RDP understands that this Agreement is a condition to the completion of the Transactions and to effect the Private Placement Conversion, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of RDP set forth herein.
(iv) RDP is not acquiring the Conversion Shares as a result of any advertisement, article, notice or other communication regarding the Conversion Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.
(v) RDP owns and holds, beneficially and of record, the entire right, title, and interest in and to the amount of shares set forth next to its respective name on the signature page hereto.
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(vi) RDP agrees that after the date hereof and in consideration for the arrangements herein that any and all prior defaults under the SPA and the COD are hereby waived.
5. CONDITIONS TO RDP’S OBLIGATIONs hereunder.
The obligations of RDP to the Company and/or the modification of the COD contemplated in this agreement are subject to the satisfaction of each of the following conditions,
(a) The Company shall become current in all its filing requirements with the OTC no later than October 1, 2018.
(b) The Company shall make all payments to RDP required in this Agreement.
(c) Should the Company fail to become Current within 10 days or fail to make any payment to RDP as required under this Agreement, the Agreement shall terminate, and the Company and RDP will retain the rights and obligations of the COD prior to this Agreement.
(d) Company Representations. The Company hereby represents and warrants to RDP that this Agreement has been duly authorized, validly executed and delivered by the Company in accordance with its terms and the Company has full power and authority to execute this Agreement and to perform its obligations hereunder and thereunder.
6. CONDITIONS TO ComPANY’S OBLIGATIONs hereunder.
The obligations of the Company to RDP hereunder are subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing RDP with prior written notice thereof:
(a) The representations and warranties of RDP in Section 4 hereof shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date).
7. MISCELLANEOUS.
(a) Expenses. Except as otherwise set forth in this Agreement, each party to this Agreement shall bear its own expenses in connection with transactions contemplated hereby.
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(b) Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement 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 jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(c) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which 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; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.
(d) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
(e) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
(f) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(g) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(h) No Strict Construction. 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.
(i) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
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(j) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
Good
Gaming, Inc.
000 XxXxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Telephone: (000)000-0000
Attention: Chief Executive Officer
Copy (which shall not constitute valid notice) to:
Sichenzia Xxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
If to RedDiamond, at :
RedDiamond Partners, Inc.
000 Xxxx Xxxxxx Xxxxx Xx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxx XxXxxxxx
[Signature Page Follows]
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IN WITNESS WHEREOF, RedDiamond and the Company have caused their respective signature page to this Consent Agreement to be duly executed as of the date first written above.
| COMPANY: | ||
| GOOD GAMING, INC. | ||
| By: | /s/ Xxxxx X. Xxxxxxx | |
| Name: | Xxxxx X. Xxxxxxx | |
| Title: | Chairman | |
| HOLDERS: | ||
| REDDIAMOND PARTNERS, INC. | ||
| By: | /s/ Xxxx XxXxxxxx | |
| Name: | Xxxx XxXxxxxx | |
| Title: | ||
