MSTI Holdings, Inc. Hawthorne, New Jersey 07506 February 12, 2008
000-000
Xxxxxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
February
12, 2008
To
the
MSTI Holdings, Inc. Unit Investors:
1. Liquidated
Damages; Repricing Warrants.
Reference is hereby made to that certain Registration Rights Agreement, dated
as
of May 24, 2007, as supplemented by the addendum thereto, dated as of May 24,
2007 (as amended, the “Registration
Rights Agreement”),
by
and among MSTI Holdings, Inc., a Delaware corporation (the “Company”),
and
each investor identified on the signature pages thereto (each, including its
successors and assigns, an “Investor”
and,
collectively, the “Investors”).
Capitalized terms used in this letter agreement and not otherwise defined shall
have the meanings ascribed to them in the Registration Rights Agreement.
Pursuant
to Section 1.2 of the Registration Rights Agreement, if the Company did not
take
certain actions to cause the registration statement covering the Registrable
Securities (the “Registration Statement”) to be declared effective by the
Securities and Exchange Commission (the “Commission”)
on or
prior to the Effectiveness Date, as such date has been extended to November
21,
2007 by letter agreement between the Investors and the Company, dated September
6, 2007, then the Company would be required to pay to each Investor, for each
month in which the Registration Statement has not been declared effective,
an
amount in cash equal to 1% of the aggregate purchase price paid by such Investor
for any unregistered Registrable Securities then held by such Investor
(“Liquidated
Damages”).
The
undersigned Investors hereby waive any non-compliance with the aforementioned
Section 1.2 of the Registration Rights Agreement, and waive any default or
Event, and any breach or threatened breach, arising under the Registration
Rights Agreement or any other documents, including the Warrants and Investors’
subscription agreements (collectively, the “Transaction Documents”), and waive
any Liquidated Damages, in each case resulting or that could result from the
Company’s failure to comply with said section.
In
exchange for such waiver by the Investors of their rights to Liquidated Damages,
the parties hereto agree that Section 2(b) of the Warrants be hereby amended
to
reduce the exercise price from $1.00 to $0.65 per share.
2. Repricing
Outstanding Options and Warrants.
The
undersigned hereby further agree that, notwithstanding anything in the
Transaction Documents to the contrary, the exercise price of all options and
warrants issued by the Company which are currently outstanding shall be set
at
$0.65 per share.
3. Filing
of 8-K.
On or
before 5:30 pm (New York time) on the date after all undersigned have signed
this letter agreement, the Company shall file a Current Report on Form 8-K,
reasonably acceptable to each undersigned disclosing the material terms of
this
letter agreement, which shall include this letter agreement as an attachment
thereto.
4. Independent
Nature of Investors’ Obligations and Rights.
The
Company has elected to provide all Investors with the same terms and letter
agreement for the convenience of the Company and not because it was required
or
requested to do so by the Investors. The obligations of each Investor under
this
letter agreement, and any Transaction Document, are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible
in
any way for the performance or non-performance of the obligations of any other
Investor under this letter agreement or any Transaction Document. Nothing
contained herein or in any Transaction Document, an no action taken by any
Investor pursuant thereto, shall be deemed to constitute the Investors as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investors are in any way acting in concert or
as a
group with respect to such obligations or the transactions contemplated by
this
letter agreement or the Transaction Documents. Each Investor shall be entitled
to independently protect and enforce its rights, including, without limitation,
the rights arising out of this letter agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Investor to be joined
as
an additional party in any proceeding for such purpose. Each Investor has been
represented by its own separate legal counsel in their review and negotiation
of
this letter agreement and the Transaction Documents.
5. Miscellaneous.
Subject
to the waivers and agreements provided herein, the Transaction Documents shall
remain in full force and effect. Except as expressly set forth herein, this
letter agreement shall not be deemed to be a waiver, amendment or modification
of any provisions of the Transaction Documents or of any right, power or remedy
of the Investors, or constitute a waiver of any provision of the Transaction
Documents (except to the extent herein set forth), or any other document,
instrument and/or agreement executed or delivered in connection therewith,
in
each case whether arising before or after the date hereof or as a result of
performance hereunder or thereunder. The Investors reserve all rights, remedies,
powers or privileges available under the Transaction Documents, at law or
otherwise, subject to the terms of this letter agreement. This letter agreement
shall not constitute a novation or satisfaction and accord of the Transaction
Documents or any other document, instrument and/or agreement executed or
delivered in connection therewith. This letter agreement shall be governed
by
and construed in accordance with the laws of the State of New York.
Please
indicate your acknowledgment of and agreement to the foregoing by signing a
copy
of this letter and returning an executed original to the Company.
Pursuant
to Section 4.2 of the Registration Rights Agreement, this letter will become
effective and binding on all of the Investors with respect to the waiver and
amendment of provisions contained in the Registration Rights Agreement upon
execution of this letter agreement by the Investors holding a majority of the
outstanding Registrable Securities. This letter agreement may be executed by
the
parties hereto in counterparts, and execution may be evidenced by facsimile
or
other electronic transmission of a signed signature page by any party hereto,
and all of such counterparts together shall constitute one and the same
instrument.
Sincerely, | ||
|
|
|
/s/ Xxxxx Xxxxxxxxx | ||
Xxxxx Xxxxxxxxx |
||
Chief Executive Officer |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
Egatniv, LLC | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxx Xxxxxxx | Dated: March 31, 2008 | ||
[sign above line] |
||||
Name: | Xxxx Xxxxxxx | |||
[print name of signatory above line] |
||||
Title: | Member | |||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
Sandor Capital Master Fund LP | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxx X. Xxxxx | Dated: February 28, 2008 | ||
[sign above line] |
||||
Name: | Xxxx X. Xxxxx | |||
[print name of signatory above line] |
||||
Title: | General Partner | |||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxx Xxxxxxx | Dated: February 27, 2008 | ||
[sign above line] |
||||
Name: | Xxxxx Xxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
Auracana LLC | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxx Xxxxxx | Dated: February 27, 2008 | ||
[sign above line] |
||||
Name: | Xxxxx Xxxxxx | |||
[print name of signatory above line] |
||||
Title: | Manager | |||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ W. Xxxxxxx Xxxxxxx | Dated: March 28, 2008 | ||
[sign above line] |
||||
Name: | W. Xxxxxxx Xxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxx Xxxxxxxxxxx | Dated: March 27, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxx Xxxxxxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxx Xxxxxx | Dated: March 20, 2008 | ||
[sign above line] |
||||
Name: | Xxxxx Xxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxx Xxxxxxx Winisette | Dated: March 20, 2008 | ||
[sign above line] |
||||
Name: | Xxxx Xxxxxxx Winisette | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxx X. High | Dated: March 27, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxx X. High | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
Xxxxxxx Enterprises, LLC | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxx X. Xxxx | Dated: February 19, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxx X. Xxxx | |||
[print name of signatory above line] |
||||
Title: | President | |||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxx X. Xxxxxxx | Dated: March 20, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxx X. Xxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxxxx Xxxxxxx | Dated: March 20, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxxxx Xxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
Global Transport Logistics, Inc. | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxxx Xxxxxxxxx | Dated: February 29, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxxx Xxxxxxxxx | |||
[print name of signatory above line] |
||||
Title: | President | |||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxx X. Xxxxx | Dated: February 15, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxx X. Xxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxx Xxxxxxx | Dated: March 31, 2008 | ||
[sign above line] |
||||
Name: | Xxxx Xxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxx X. Xxxxxxxxx | Dated: February 18, 2008 | ||
[sign above line] |
||||
Name: | Xxxxx X. Xxxxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ A. Xxxx Xxxxxxxxx | Dated: March 31, 2008 | ||
[sign above line] |
||||
Name: | A. Xxxx Xxxxxxxxx | |||
[print name of signatory above line] |
||||
Title: | ||||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
GRQ Consultants Inc. 401K Plan FBO Xxxxx Xxxxx and Xxxxx Xxxxx | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxx Xxxxx | Dated: March 31, 2008 | ||
[sign above line] |
||||
Name: | Xxxxx Xxxxx | |||
[print name of signatory above line] |
||||
Title: | Trustee | |||
[print title of signatory, if investor is entity] |
ACCEPTED AND AGREED: | ||||
“Investor” | ||||
Monarch Capital Fund Ltd. | ||||
[if investor is entity, print entity’s name above line] |
||||
By: | /s/ Xxxxxx Xxx Xxxxxx | Dated: March 31, 2008 | ||
[sign above line] |
||||
Name: | Xxxxxx Xxx Xxxxxx | |||
[print name of signatory above line] |
||||
Title: | Director of Navigator Management Ltd., General Partner of Monarch Capital Fund Ltd. | |||
[print title of signatory, if investor is entity] |