MSTI Holdings, Inc. Hawthorne, New Jersey 07506 January 11, 2008
000-000
Xxxxxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
January
11, 2008
To
the
MSTI Holdings, Inc. Debenture Holders:
Reference
is hereby made to that certain Securities Purchase Agreement, dated as of May
24, 2007 (the “Purchase
Agreement”),
by
and among MSTI Holdings, Inc., a Delaware corporation (the “Company”)
and
each entity identified on the signature pages thereto (each, including its
successors and assigns, a “Purchaser”
and,
collectively, the “Purchasers”).
Capitalized terms used in this letter agreement and not otherwise defined shall
have the meanings ascribed to them in the Purchase Agreement.
1.
Subsequent
Equity Sales.
Pursuant to Section 4.13(a) of the Purchase Agreement, as amended, the Company
is prohibited from issuing shares of Common Stock or Common Stock Equivalents
until 90 days after the Registration Statement is declared effective, except
for
Exempt Issuances. The undersigned Purchasers hereby waive any non-compliance
with the aforementioned Section 4.13(a), and waive any default or Event of
Default (as such term is defined in the Debentures), and any breach or
threatened breach, arising under the Purchase Agreement or any other Transaction
Document, including without limitation the Debentures and the Warrants, and
waive any and all penalties, damages, claims, and adjustments (including the
price protection adjustment described in Section 3(b) of the Warrants) resulting
or that could result from the issuance of (i) options to purchase an aggregate
of 1,278,000 shares of Common Stock at an exercise price of $0.65 per share
to certain employees, directors and consultants of the Company under its 2007
Incentive Stock Plan, and (ii) an aggregate of up to 500,000 shares of
Common Stock to certain consultants of the Company.
2. Equipment
Lease Financing.
Pursuant
to Section 7(b) of the Debentures, as long as the Debentures are outstanding,
the Company is prohibited from creating any Liens (as such term is defined
in
the Debenture) on its assets. The undersigned hereby waive any non-compliance
with such section and agree that the creation of Liens in connection with the
Company entering into equipment lease financing(s) arrangements solely with
respect to (i) the equipment listed on Schedule I attached hereto, and (ii)
equipment purchased by the Company that is paid for after the date hereof,
in an
aggregate amount of up to $3 million, shall be permitted under such section
and
not constitute a default or Event of Default (as such term is defined in the
Debentures).
For
purposes of clarity, the $3 million amount referenced in the preceding section
includes, and is not in addition to, the equipment amounts listed on Schedule
I
hereto.
3. Miscellaneous.
Subject
to the waivers and agreements provided herein, the Transactions 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 Purchasers, 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 Purchasers 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 be governed by and construed in accordance with the laws of
the
State of New York.
4. Filing
of 8-K.
On or
before 5:30 pm (New York time) on the date after all Purchasers have signed
this
letter agreement, the Company shall file a Current Report on Form 8-K,
reasonably acceptable to each Purchaser disclosing the material terms of this
letter agreement, which shall include this letter agreement as an attachment
thereto.
5. Independent
Nature of Purchasers' Obligations and Rights.
The
Company has elected to provide all Purchasers 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 Purchasers. The obligations of each Purchaser under
this letter agreement, and any Transaction Document, are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under this letter agreement or any Transaction Document.
Nothing contained herein or in any Transaction Document, and no action taken
by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers
as
a partnership, an association, a joint venture or any other kind of entity,
or
create a presumption that the Purchasers 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 Purchaser 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 Purchaser
to
be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in their review
and negotiation of this letter agreement and the Transaction
Documents.
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.
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 | ||
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[DEBENTURE
HOLDER SIGNATURE PAGE]
ACCEPTED
AND AGREED:
DKR
SOUNDSHORE OASIS HOLDING FUND LTD.
By:
DKR
Oasis Management Company LP,
its
investment manager
|
By:/s/
Xxxxxxx Xxxxxx
|
Dated:
January 30, 2008
|
|
|
Name:
Xxxxxxx
Xxxxxx
|
||
|
Title:
Authorized
Signatory
|
||
|
ALPHA
CAPITAL ANSTALT
|
||
|
By:
/s/
Xxxxxx Xxxxxxxx
|
Dated:
January 30, 2008
|
|
|
Name:
Xxxxxx
Xxxxxxxx
|
||
|
Title:
Director
|
||
|
GEMINI
MASTER FUND, LTD.
|
||
|
By:
/s/
Xxxxxx X. Xxxxxxx
|
Dated:
January 30, 2008
|
|
|
Name:
Xxxxxx
X. Xxxxxxx
|
||
|
Title:
President
|
||
|
WHALEHAVEN
CAPITAL FUND LIMITED
|
||
|
By:
/s/
Xxxxx Xxxxxxxx
|
Dated:
January 29, 2008
|
|
|
Name:
Xxxxx
Xxxxxxxx
|
||
|
Title:
CFO
|
||
|
CMS
CAPITAL
|
||
|
By:
/s/
Xxxxxx Xxxxx
|
Dated:
January 29, 2008
|
|
|
Name:
Xxxxxx
Xxxxx
|
||
|
Title:
Director
|
BRIO
CAPITAL L.P.
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3 -
SCHEDULE
I
|
Equipment
Description
|
Amount
|
|||
|
CSI
Digital IPTV headend equipment
|
$ | 1,000,000.00 | ||
|
Blonder
Tongue headend equipment
|
$
|
150,000.00
|
||
|
WINCOM
microwave equipment
|
$ | 31,389.00 | ||
|
NBS
telephone equipment
|
$
|
44,100.00
|
||
|
Network
hardware resale internet switch
|
$ | 49,895.00 | ||
|
TOTAL
|
$
|
1,275,384.00
|
||
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