AMENDMENT, MODIFICATION AND CONSENT TO TRANSACTION DOCUMENTS AGREEMENT
Agreement made this ____ day of August, 2005 ("Amendment") among
Conspiracy Entertainment Holdings, Inc., a Utah corporation (the "Company"), and
the signators hereto who are Lenders under certain Securities Purchase
Agreements with the Company dated as of August 31, 2004 ("First Closing Date")
and January 31 2005 ("Second Closing Date") (each a "Lender" and collectively
"Lenders").
For good and valuable mutual consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. All capitalized terms herein shall have the meanings ascribed to them
in the Securities Purchase Agreements and related documents ("Transaction
Documents").
2. The Company and the Lenders hereby agree to deem the Transaction
Documents amended to reflect the additional Purchase Price ("Additional Purchase
Price") as set forth on Schedule A hereto. Purchase Price shall mean the
aggregate of the Purchase Price in connection with the First Closing Date and
Second Closing Date and the Additional Purchase Price.
3. An additional Closing (the "Subsequent Closing") shall take place on or
before August___, 2005 (the "Subsequent Closing Date") in connection with the
Additional Purchase Price and the Notes to be issued in connection therewith
(the "Notes") (a form of which has been approved by the Company and Lenders),
upon satisfaction of all conditions to Closing set forth in this Amendment. The
Notes to be delivered on the Subsequent Closing Date are included in the
definition of "Securities" in the Transaction Documents.
4. All the representations, warranties and undertakings made by the
Company in the Transaction Documents as of the First Closing Date and Second
Closing Date are hereby made by the Company as of the Subsequent Closing Date,
as if such representations, warranties and undertakings were also made and given
on the Subsequent Closing Date.
5. All of the covenants and conditions set forth in the Transaction
Documents are hereby adopted and renewed by the Company as of and for the
Subsequent Closing Date.
6. On or before the Subsequent Closing Date, the Company will deliver to
the Lenders the Notes issued as of the Subsequent Closing Date in the amounts
set forth on Schedule A hereto in connection with the Additional Purchase Price.
Thereafter each Lender will deliver its Additional Purchase Price to the Company
pursuant to wire instructions delivered by the Company to lenders. The
Subsequent Closing Date will be the date the Lenders give instructions for the
Additional Purchase Price to be transmitted to Company.
7. The Conversion Price of the Debentures issued on or about the First
Closing Date and Second Closing Date for each of the Lenders, Xxxxxxxxxxx
Limited Partnership, Whalehaven Fund Limited and Whalehaven Capital LP, is
hereby amended to be the lesser of $0.05 or seventy percent (70%) of the average
of the five lowest closing bid prices for the Company's Common Stock as reported
by Bloomberg, L.P. for the thirty (30) trading days prior to a Conversion Date.
8. The Maturity Date of the Notes to be issued on the Subsequent Closing
Date will be February 1, 2006.
9. In connection with the Additional Purchase Price, Palladium Capital
Advisors, LLC, will receive $5,000 and 200,000 restricted Shares of Common Stock
within five days after the next meeting of the Company's shareholders. The cash
fee will be payable on the Subsequent Closing Date by the Company.
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10. The attorney for the Lenders will receive legal fees from the Company
of $_____ which will be payable on the Subsequent Closing Date and held back by
Lenders from the Additional Purchase Price.
11. The parties hereto acknowledge and agree that the Security Interest
Agreements executed by the Company and Lenders on or about the First Closing
Date and Second Closing Date shall relate to the Additional Purchase Price as if
such Additional Purchase Price had been paid and released to the Company on the
First Closing Date. The obligations arising under the Transaction Documents
entered into in connection with the Notes and the Additional Purchase Price are
included as a component of the Obligations as defined in the Security Interest
Agreements. The Lenders or their agent or a representative are authorized by the
Company to file an additional filing or amendment to any and all UCC-1 or UCC-3
Financing Statements filed on behalf of the Lenders. Annexed hereto as Exhibit B
is additional information deemed and made a part of Exhibit B to the Security
Interest Agreements.
12. As further security for the portion of the Obligations relating to the
Note, the Company agrees to irrevocably instruct all of the payors identified on
Schedule B hereto to deliver and make all payments payable to the Company by
such payors by wire transfer to Alpha Capital Aktiengesellschaft ("Disbursing
Agent") at 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 to :
Bank of Nova Scotia
Yonge and Bloor Branch
00 Xxxxx Xxxxxx Xxxx
Xxxxxxx: 00000
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Account Name: Alpha Capital 2
Account No.: 476960040614
Swift Code: XXXXXXXX
The Disbursing Agent will immediately upon the clearance and
availability of such funds disburse 65% of all such funds to each Lender in the
proportion that each such Lender's Note bears to aggregate Notes of $223,600
("Proportionate Share") and the balance will be wired to the Company less wire
fees, as follows:
BANK OF AMERICA
Century City Main
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
ABA: 000000000
SWIFT: BOFAUS 6S
Account Name: Conspiracy Entertainment
Acct. Number: 07472-06906
Upon receipt of wire, Disbursing Agent will notify Conspiracy of the amount and
source. Conspiracy will then submit a request to Disbursing Agent for 35% . If
Conspiracy requires more than 35%, Conspiracy will provide a request and
explanation in writing, which increase will be subject to Lenders' unanimous
reasonable approval.Portions of disbursements to Lenders that derive from each
Lender's Proportionate Share of Borrower's Profits (as defined in the Note) will
be allocated to Lender's Proportionate Share of Borrower's Profits and the
balance to repayment of interest accrued on this Note, if any, and then to
reduction of principal of the Note. The Company will notify the Disbursing Agent
not later than three days after a disbursement to the Company as to the amount
of the payment received by the Disbursing Agent which represents Borrower's
Profits and the amount which represents repayment of principal ("Profit
Notice"). The Profit Notice must contain calculations supporting the Company's
allocations. In the event the Disbursing Agent does not timely receive a Profit
Notice, the entire amount delivered to Lenders will be allocated to Lenders
Proportionate Share of Borrower's Profits and none to amounts due under the
Note.
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13. The company will instruct every payor of an obligation to the Company
including the payors identified on Exhibit C hereto, outstanding on the date
hereof and arising after the date of this Amendment to pay any such obligation
to the Disbursing Agent to be disbursed in accordance with the terms of this
Amendment. A copy of each such instruction letter will be delivered to Grushko &
Xxxxxxx, P.C., attn: Xxxxxx X. Xxxxxxx, Esq., to telecopier: (000) 000-0000 not
later than three (3) business days after the obligation is incurred.
14. The Company will provide an accounting on the 3rd and 18th day of each
month (or the first business day thereafter if such 3rd or 18th day is not a
business day) detailing all orders or any other matter which would generate a
payment of money to the Company and a copy of the instruction to such new payor
(countersigned by the new payor) to pay such obligation to the Disbursing Agent.
15. The Payments to the Disbursing Agent will continue until the Lender's
have received all sums due under the Note and their aggregate Proportionate
Shares of Borrower's Profits.
16. Any payment received by the Company from any source after the date of
this Amendment will be immediately delivered by the company to the Disbursing
Agent to be disbursed according to the terms of this Amendment. All such sums
will be deemed received and held in trust by the Company on behalf of the
Lenders.
17. The Additional Purchase Price will be used by the Company exclusively
as follows: $125,000 for further commercialization of the Puzzle Game Venture
(as defined in the Note) and up to no more than $40,000 per month for
operations.
18. Any failure by the Company to comply with any term of this Amendment
shall be an Event of Default under the Transaction Documents and Notes and a
material breach of the Company's obligations.
19. The undersigned consent to the amendment of all Schedules, Exhibits
and documents including but not limited to the Security Interest Agreements to
include the Additional Purchase Price.
20. This Agreement may be signed in one or more counterparts, each of
which shall be deemed an original.
21. A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.
22. The parties hereto agree to expeditiously proceed with the Subsequent
Closing.
23. Except as amended hereby all other terms of the Transaction Documents
shall remain in full force and effect including but not limited to those terms
governing venue, jurisdiction and governing law.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment as of the date first written above.
"COMPANY"
CONSPIRACY ENTERTAINMENT
HOLDINGS, INC.,
a Utah corporation
By:
--------------------------------
Its:
-------------------------------
"LENDERS":
-------------------------------- ---------------------------------
ALPHA CAPITAL AKTIENGSELLESCHAFT WHALEHAVEN CAPITAL FUND, LTD
"APPROVED"
-------------------------------- ---------------------------------
XXXXXXXXXXX LIMITED PARTNERSHIP WHALEHAVEN FUND LIMITED
-------------------------------- ---------------------------------
WHALEHAVEN CAPITAL LP
Acknowledged and Agreed:
ALPHA CAPITAL AKTIENGESELLSCHAFT
--------------------------------
Disbursing Agent
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SCHEDULE A TO AMENDMENT
--------------------------------------------------------------------------------
SUBSCRIBER ADDITIONAL PURCHASE
PRICE
--------------------------------------------------------------------------------
ALPHA CAPITAL AKTIENGSELLESCHAFT $111,800.00
Xxxxxxxxx 0,
Xxxxxxxxxxx 0000
Xxxxx, Xxxxxxxxxxxxx
Fax: 000-00-00000000
--------------------------------------------------------------------------------
WHALEHAVEN CAPITAL FUND LIMITED $111,800.00
0xx Xxxxx, 00 Xxx-Xx-Xxxxx Xxxx
Xxxxxxxx XX00, Xxxxxxx
Fax: 000 000-0000
--------------------------------------------------------------------------------
TOTAL $223,600.00
--------------------------------------------------------------------------------
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Exhibit C
This Exhibit is intended to update Exhibit B to the
Security Interest Agreements.
[Describe all receivables included in the
Security Interest Agreements as Collateral.]
ADDITIONAL INFORMATION RE COLLATERAL, ETC.
1. Bravado International Merchandising Services, Inc. Three (3) payments of
$125,000 each, the first payment due now shall be paid to the law firm of
Xxxx, August and Xxxxx after which legal fees shall be deducted from the
payment with the balance wired to the Disbursing Agent.
2. SVG Distribution, Inc. Payments shall consist of profits from re-orders of
previously released products. Receivables to date include $10,008 for Seek
and Destroy (PS2), $3,780 for American Tail (GBA), and $3,780 Land Before
Time (GBA). Products were ordered late July 2005 and payment estimated to
be received in September 2005.
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