BRIGHTCUBE
The image, in all its dimensions.
February 18, 2002
Intellect Capital Group, LLC
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Gentlemen:
Reference is made to that certain Promissory Note and Loan and Security
Agreement, dated as of July 16, 2001 by and between BRIGHTCUBE, INC., a Nevada
corporation (the "Borrower") and INTELLECT CAPITAL GROUP, LLC, a Delaware
limited liability company (the "Lender") (such agreement, as amended, modified,
supplemented and restated from time to time, the "Loan Agreement"; capitalized
terms used herein without definition shall have the meanings ascribed to them in
the Loan Agreement).
Lender acknowledges and is aware that the Company is currently negotiating a
bridge loan through its Placement Agent, vFinance Investments, Inc., the
"Bridge". The form of this Bridge are Notes bearing interest at a rate of 12%
per annum, with principal and interest due nine months from the date of
issuance. The purchasers will also receive one warrant to purchase a share of
Common Stock (a "Warrant") for every dollar invested. Additionally, if all of
the principal and accrued interest in the Notes are not repaid within 270 days
after the last close then the Company will issue warrants to purchase 2,500,000
shares of Common Stock for every 30 days past due, or a warrant to purchase
83,333 shares for every day past due in the case of a partial month, up to a
total of 10,000,000 warrants (the "Penalty Warrants"). These warrants will have
an exercise price of $.06 per share. Any such Penalty Warrants will be issued
pro-rata to the total Units subscribed and then including any unpaid Notes. For
example, if 300 days from the date of the last close, only 50% of the Notes had
been repaid, the Company would issue warrants covering 1,250,000 shares of
common stock to the Note holders. These warrants would be allocated evenly
among the Note holders.
As a material inducement to the Lender to enter into this letter, (i) the
Borrower hereby agrees to issue to the Lender a warrant to purchase five hundred
thousand (500,000) shares of the Borrower's common stock at an exercise price of
$.09 per share on the terms and conditions set forth in the Warrant Agreement to
Purchase Common Stock of BrightCube, Inc. attached hereto as Exhibit A; (ii) the
Borrower agrees to lower the exercise price of the previously issued warrants
covering l,875,000 shares of common stock from $.30 to $.09; (iii) the Borrower
agrees to pay the Promissory Note according to the terms thereof as modified by
this letter, and agrees to perform all of the acts required under the terms of
Loan Documents; (iv) the Borrower agrees to allow Lender to participate in the
Penalty Warrants under the same terms as the other participants in the Bridge if
not repaid in full within nine months after the last close of the Bridge (Lender
will participate pro rata with any
Brightcube, Inc. 000 Xxxxxx Xx. Xx Xxxxxxx, XX 00000
Tel: 000.000.0000 Fax: 000.000.0000 xxx.xxxxxxxxxx.xxx
BRIGHTCUBE
The image, in all its dimensions
outstanding holders of the Bridge(1)) and (v) amend the interest rate described
in the Promissory Note from 8.0% to 12% per annum.
In consideration of the Borrower's undertakings set forth above, the Lender
acknowledges and confirms: (1) in the event of repayment of less than the entire
amount then outstanding, Lender shall receive $1 for every $2 paid to the note
holders under the Bridge, (ii) that Lender shall not transfer the Promissory
Note until the Bridge is repaid in full and (iii) that Lender shall not exercise
Lender's ability under the Loan and Security Agreement and Promissory Note, both
dated July 16, 2001, for demand payment rights, as described in Section 9.1
until the sooner of nine (9) months from the date of the last closing of the
Bridge or November 30, 2002, whichever is sooner. In the event that the Borrower
files for or declares any form of bankruptcy, the Forbearance immediately will
cease to apply.
Please confirm your acceptance of and agreement with the foregoing by executing
a copy of this letter in the space provided below and returning it to us.
BORROWER: BRIGHTCUBE, INC.
A Nevada corporation
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
--------------------------------
Title: Chief Financial Officer
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LENDER: INTELLECT CAPITAL GROUP, LLC
A Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Title: CEO
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1 For example, if note holders from the Bridge plus Lender are past due 30 days,
warrants covering 2,500,000 shares of common stock will be issued pro rata among
the amount then still outstanding. If notes totaling $500,000 from the Bridge
plus $500,000 from Lender were then outstanding the warrants covering 2,500,000
shares would be split evenly between the note holders from the Bridge and the
Lender.
Brightcube, Inc. 000 Xxxxxx Xx. Xx Xxxxxxx, XX 00000
Tel: 000.000.0000 Fax: 000.000.0000 xxx.xxxxxxxxxx.xxx
