EXHIBIT 10.31
AGREEMENT, dated as of October 3, 2002, by and between MediaBay,
Inc., a Florida corporation, and Xxxx Xxxxxxx ("Xxxxxxx").
W I T N E S S E T H
WHEREAS, Xxxxxxx is the holder of a 9% Convertible Senior
Subordinated Promissory Note in the principal amount of $500,000 (the "Existing
Note") of MediaBay, Inc. (the "Company"), which Existing Note is convertible
into shares of common stock of the Company;
WHEREAS, Xxxxxxx is the holder of all of the outstanding shares of
Series A Convertible Preferred Stock (the "Preferred Stock") of the Company;
WHEREAS, the Company is the borrower under that certain Amended and
Restated Credit Agreement dated as of April 30, 2001, by and among the Company,
and the banks, financial institutions and other institutions named therein, as
amended to date (the "Credit Agreement"), the obligations of the Company under
which are scheduled to mature on January 15, 2003;
WHEREAS, the lenders under the Credit Agreement (the "Lenders") have
agreed to amend the Credit Agreement in the form of Exhibit A annexed hereto
(the "Amended Credit Agreement") and, as a condition to entering into the
Amended Credit Agreement, the Lenders require that the Company obtain at least
$1,500,000 of additional financing;
WHEREAS, Huntingdon Corporation ("Huntingdon") has proposed to loan
to the Company at least $1,500,000 which shall be pari passu with the Huntingdon
Financing Debt pursuant to senior secured convertible notes on the terms set
forth in the Loan Agreement (which may be increased to up to $3,000,000
(provided that any such additional loans shall be senior subordinated unsecured
loans) and, if not loaned by Huntingdon, may be loaned by Xxxxxx Xxxxxxx or one
of his affiliates or a third party) (the "Loan Agreement") dated as of the date
hereof by and between Huntingdon and the Company (the "Huntingdon Financing");
WHEREAS, the Company desires to amend the maturity date of the
Existing Note;
WHEREAS, in consideration of Xxxxxxx'x agreements, consents and
waivers, the Company has agreed to provide to Xxxxxxx at least 90 business days
prior written notice of any prepayment of the Existing Note;
WHEREAS, the Company, Huntingdon, Xxxx Xxxxxxx and Xxxxxxx have
entered into a Registration Rights Agreement dated as of the date hereof (the
"Registration Rights Agreement"); and
WHEREAS, the Company agreed to grant to Huntingdon certain
registration rights with respect to shares of common stock of the Company which
may become issuable in connection with the Huntingdon Financing by amending and
restating the Registration Rights Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the undersigned hereby agree as follows:
1. Covenants of Xxxxxxx.
(a) Xxxxxxx hereby consents to the execution by the Company of
the Amended Credit Agreement and the consummation of the transactions
contemplated thereby as a holder of the Existing Note and Preferred Stock (in
accordance with Section 7(b) Articles of Amendment to Articles of Incorporation
of the Company filed with the Department of State of the State of Florida on
January 18, 2002 (the "Articles of Amendment") designating the Preferred Stock).
(b) Xxxxxxx hereby consents to the execution of the Loan
Agreement and consummation by the Company of the Huntingdon Financing and the
other transactions contemplated by the Loan Agreement as a holder of the
Existing Note and the Preferred Stock (in accordance with Section 7(b) of the
Articles of Amendment).
(c) Xxxxxxx hereby waives any rights he may have under the
Existing Note which relate to or arise out of the execution of the Loan
Agreement and the consummation of the Huntingdon Financing, including, without
limitation, the covenants and conditions set forth in Sections 6.2, 6.3 and 6.4
of the Existing Note.
(d) The Company's obligations to Huntingdon under the
Huntingdon Financing shall be deemed "Senior Debt" as such term is defined in
the Existing Note.
2. Amendment of Existing Note.
(a) The maturity date of the Existing Note shall be extended
from December 31, 2004 to September 30, 2007.
(b) Section 1.1 of the Existing Note shall be amended by
adding the following sentence after the last sentence of Section 1.1:
Any interest on this Note which is not paid on the
date such interest payment is due on such date shall
accrue interest from and after the date such interest
payment was due (including due to the fact that it was
accrued in accordance with this Section 1.1) at the same
rate of interest as payable on the unpaid principal
balance of this Note, and shall be paid on the same date
on which any interest accrued on the unpaid principal
balance of this Note is paid.
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(c) A new Section 1.9 shall be added to the Existing Note
after the end of Section 1.8 of the Existing Note which reads as follows:
1.9 Commencing as of December 31, 2004, the Holder shall
have the right, at any time on or after the date on
which the Company has repaid all of its obligations
under the Senior Credit Agreement, to make a demand for
payment of the unpaid principal balance of, and interest
on, this Note and, on such date, the outstanding
principal balance of, and interest on, this Note shall
become due and payable.
3. Covenant of the Company. The Company agrees that, notwithstanding
Section 1.6 of the Existing Note, for as long as the Existing Note is held by
Xxxxxxx, the Company will not prepay the Existing Note, in whole or in part,
unless the Company provides Xxxxxxx 90 days prior written notice of such
prepayment.
4. Registration Rights Agreement. The Registration Rights Agreement
shall be amended and restated in the form of Exhibit C annexed hereto.
5. Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument, facsimile signatures shall e effective and binding as original
signatures.
IN WITNESS WHEREOF, the undersigned has executed this Agreement,
effective as of the date first written above.
MEDIABAY, INC.
By: /s/ Xxxx X. Xxxx
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Xxxx Xxxx, Executive VP and CFO
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
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