LETTER AGREEMENT
Exhibit
10.1
LETTER
AGREEMENT
October
15, 2008
00 Xxxxx
Xxxxxxxx, Xxxxx 000
Xxxxx
Xxxxxx, XX 00000
Attention: CEO
Ladies
and Gentlemen:
Reference
is made to (i) the Securities Purchase Agreement dated as of May 28, 2008
between Pervasip Corp. (the “Company”), LV Administrative
Services, Inc. (the “Agent”), and the Purchasers
from time to time party thereto (the “Purchasers” and together with
the Agent, the “Creditor
Parties”) (as amended, restated, modified and/or supplemented from time
to time, the “Purchase
Agreement”), (ii) the Master Security Agreement dated as of May 28, 2008
from the Company, certain Subsidiaries of the Company in favor of the Agent (as
amended, restated, modified and/or supplemented from time to time, the “Master Security Agreement”),
(iii) the Stock Pledge Agreement dated May 28, 2008 by and among the Company,
certain Subsidiaries of the Company and Agent (as amended, restated, modified
and/or supplemented from time to time, the “Stock Pledge Agreement”) and
(iv) the Subsidiary Guaranty dated May 28, 2008 by certain Subsidiaries in favor
of the Company (as amended, restated, modified and/or supplemented from time to
time, the “Subsidiary
Guaranty” and together with the Purchase Agreement, the Master Security
Agreement, the Stock Pledge Agreement and the Related Agreements referred to in
the Purchase Agreement, the “Existing
Agreements”). Capitalized terms used herein that are not
defined shall have the meanings given to them in the Existing Agreements, as
applicable.
The
Company and the Creditor Parties have agreed to make certain changes to the
Purchase Agreement.
In
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
Subject
to satisfaction of the conditions precedent set forth below, the Purchase
Agreement is hereby amended as follows:
(i) The first
paragraph of the Recitals to the Purchase Agreement is hereby deleted and
replaced in its entirety with the following:
“WHEREAS, the Company has authorized
the sale to each Purchaser of a Secured Term Note in the form of Exhibit A hereto in
the principal amount set forth opposite such Purchaser’s name on Schedule 1 hereto
(each as amended, restated, modified and/or supplemented from time to time, the
“Closing Date Term
Note”);
(ii) Section
1 of the Purchase Agreement is hereby deleted and replaced in its entirety with
the following:
“1. Agreement to Sell and
Purchase.
(a) Pursuant
to the terms and conditions set forth in this Agreement, on the Closing Date (as
defined in Section 3), the Company shall sell to each Purchaser, and each
Purchaser shall Purchase from the Company, the Closing Date Term Note in the
principal amount set forth opposite such Purchaser’s name on Schedule 1
hereto. The sale of the Closing Date Term Note on the Closing
Date shall be known as the “Closing Date Offering.” The Closing Date
Term Note will mature on the Maturity Date (as defined in the Closing Date Term
Note).
(b) Pursuant
to the terms and conditions set forth in this Agreement and the Related
Agreements, on October 15, 2008, the Company shall sell to Valens Offshore SPV
I, Ltd. (“Valens Offshore I”), and Valens Offshore I shall purchase from the
Company, a Secured Term Note in the aggregate principal amount of FIVE HUNDRED
THOUSAND DOLLARS ($500,000) (as amended, modified and/or supplemented from time
to time, the “Second Term Note”). The sale of the Second Term Note shall be
known as the “Second Offering”. The Closing Date Offering and the Second
Offering shall be known collectively as the “Offering”. The Second Term Note
will mature on the Maturity Date (as defined in the Second Term Note). The
Closing Date Term Note and the Second Term Note are referred to collectively
herein as the “Notes”.
(iii) All
references to the term “Note” set forth in Section 3.2 and 3.3 of the Purchase
Agreement shall hereafter be deemed to refer to the Closing Date Term
Note.
(i) To
induce the Creditor Parties to, among other things, agree to the amendments set
forth above and for Valens Offshore I to purchase the Second Term Note, each of
the undersigned (other than the Creditor Parties):
(i) acknowledges,
ratifies and confirms that all of the terms, conditions, representations and
covenants contained in the Existing Agreements to which it is a party are in
full force and effect and shall remain in full force and effect after giving
effect to the execution and effectiveness of this letter agreement and all of
the instruments, documents and agreements contemplated hereby, including without
limitation, the Second Term Note (collectively, the “New Agreements”);
(ii) acknowledges,
ratifies and confirms that the defined term “Obligations” under (i) the Master
Security Agreement, (ii) the Stock Pledge Agreement and (iii) the Subsidiary
Guaranty, include, without limitation, all obligations and liabilities of the
Company and the Subsidiaries under the New Agreements;
(iii) acknowledges,
ratifies and confirms that the defined term “Documents” under, and as defined
in, each of the Master Security Agreement, the Stock Pledge Agreement and the
Subsidiary Guaranty, include, without limitation, all obligations and
liabilities of the Company and the Subsidiaries under the New
Agreements.
(iv) acknowledges
and confirms that (A) the occurrence of a breach and/or an Event of Default
under any of the New Agreements shall constitute a breach and/or an Event of
Default under each of the Existing Agreements and (B) the occurrence of a breach
and/or an Event of Default under any of the Existing Agreements shall constitute
a breach and/or an Event of Default under the New Agreements;
(v) represents
and warrants that no offsets, counterclaims or defenses exist as of the date
hereof with respect to the undersigned’s obligations under the Existing
Agreements to which they are a party;
(vi) acknowledges,
ratifies and confirms the grant by the Company and the Subsidiaries to the
Creditor Parties of a security interest in the assets of (including the equity
interest owned by) each of the Company and the Subsidiaries, as more
specifically set forth in the Existing Agreements.
(vii) represents
and warrants that (A) all of the representations made by or on behalf of the
undersigned in the Existing Agreements to which it is a party are true and
correct in all material respects on and as of the date hereof; (B) each of the
undersigned has the corporate power and authority to execute and deliver the New
Agreements to which it is a party; (iii) all corporate action on the part of
each of the undersigned (including their respective officers and directors)
necessary for the authorization of the New Agreements, the performance of all
obligations of the undersigned hereunder and thereunder and, the authorization,
sale, issuance and delivery of the Second Term Note has been taken; and (iv) the
New Agreements, when executed and delivered and, to the extent it is a party
thereto, will be valid and binding obligations of the undersigned;
and
(viii) releases,
remises, acquits and forever discharges each Creditor Party and their respective
employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the “Released Parties”),
from any and all actions and causes of action, judgments, executions, suits,
debts, claims, demands, liabilities, obligations, damages and expenses of any
and every character, known or unknown, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, for or because of any matter or things
done, omitted or suffered to be done by any of the Released Parties prior to and
including the date of execution hereof, and in any way directly or indirectly
arising out of or in any way connected to this letter agreement, the Existing
Agreements, the New Agreements and any other document, instrument or agreement
made by the undersigned in favor of the Creditor Parties.
(j) This
letter agreement shall become effective upon satisfaction of the following
conditions precedent: (i) such certificates, instruments, documents,
agreements and opinions of counsel as may be required by the Creditor Parties,
each of which shall be in form and substance satisfactory to the Creditor
Parties, (ii) the Company shall have reimbursed the Creditor Parties for the
full amount of all of the Creditor Parties attorneys’ fees and costs incurred in
connection with the preparation and negotiation of the letter agreement and each
of the other New Agreements and in connection with the closing of the
transactions described herein and therein and (iii) the Company shall have paid
(A) to Valens Capital Management, LLC, the investment manager of Valens Offshore
I (“VCM”), a
non-refundable payment in an amount equal to $7,500.00; (B) to Valens Offshore
I, a non-refundable payment in an amount equal to $5,000.00; and (C) to Valens
Offshore I, an advance prepayment discount deposit equal to
$5,000.00. The payments set forth in clauses (iii)(A) and (B) above
shall be deemed fully earned on the date hereof and shall not be subject to
rebate or proration for any reason. The payments set forth in clauses
(ii) and (iii) above shall be paid at closing out of funds held pursuant to a
funds escrow agreement for the purchase of the Second Term Note and a
disbursement letter executed in connection herewith.
(l) Nothing
contained herein shall (i) limit in any manner whatsoever the Company’s, each
Subsidiary and each other Person’s obligation to comply with, and the Creditor
Parties right to insist on the Company’s, the Subsidiaries and such other
Person’s compliance with, each and every term of the Existing Agreements, or
(ii) constitute a waiver of any Event of Default or any right or remedy
available to any of the Creditor Parties, or of the Company’s, the Subsidiaries
or any other Person’s obligation to pay and perform all of its obligations, in
each case whether arising under the Existing Agreements, applicable law and/or
in equity, all of which rights and remedies howsoever arising are hereby
expressly reserved, are not waived and may be exercised by any of the Creditor
Parties at any time.
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(m) The
Company acknowledges that it has an affirmative obligation to make prompt public
disclosure of material agreements and material amendments to the Existing
Agreements. The Company intends to file a Form 8-K with respect to the
transactions contemplated by this letter agreement no later than four (4)
Business Days following the date hereof, a copy of which shall be delivered to
the Creditor Parties.
(n) Except
as specifically amended herein, the Existing Agreements shall remain in full
force and effect, and are hereby ratified and confirmed. The
execution, delivery and effectiveness of this letter agreement shall not operate
as a waiver of any right, power or remedy of any of the Creditor Parties, nor
constitute a waiver of any provision of any of the Existing
Agreements. This letter agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of New York.
(o) This
letter agreement may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed to be
an original signature hereto.
Very
truly yours,
VALENS
OFFSHORE SPV I, LTD.
By:
Valens Capital Management, LLC, its investment manager
By:
/s/ Xxx
Xxxxx
Name:
Xxx
Xxxxx
Title: Authorized
Signatory
LV
ADMINISTRATIVE SERVICES, INC.
as
Agent
By:
/s/ Xxx
Xxxxx
Name:
Xxx
Xxxxx
Title: Authorized
Signatory
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CONSENTED
AND AGREED TO:
(f/k/a
eLEC Communications Corp.)
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By:/s/ Xxxx X
Xxxx
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Name:
Xxxx X. Xxxx
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Title:
CEO
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VOX
COMMUNICATIONS CORP.
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By:/s/ Xxxx X
Xxxx
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Name:
Xxxx X. Xxxx
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Title:
CEO
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AVI
HOLDING CORP.
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By:/s/ Xxxx X
Xxxx
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Name:
Xxxx X. Xxxx
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Title:
CEO
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XXXXXXXXXXXXX.XXX
CORP.
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By:/s/ Xxxx X
Xxxx
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Name:
Xxxx X. Xxxx
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Title:
CEO
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LINE ONE,
INC.
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By:/s/ Xxxx X
Xxxx
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Name:
Xxxx X. Xxxx
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Title:
CEO
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