EXHIBIT 10.26
FIFTH AMENDMENT TO BRIDGE NOTE
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THIS FIFTH AMENDMENT TO BRIDGE NOTE (this "Agreement") is made as of
the 27th day of December, 1996, by and between Styles on Video, Inc., a Delaware
corporation ("SOV"), Xxxxxxx Xxxxx, Inc., a California corporation ("FYI"), and
International Digital Investors, L.P., a Delaware limited partnership ("IDI").
RECITALS
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WHEREAS, SOV, FYI, and IDI entered into a 10% Bridge Note due October
3, 1996, dated September 19, 0000 ("xxx Xxxxxx Xxxx");
WHEREAS, SOV, FYI and IDI entered into an Amendment and Waiver
Agreement dated October 15, 1996, which, among other things, increased the
amount of the financing available to $280,000 and extended the due date of the
Bridge Note to October 29, 1996;
WHEREAS, SOV, FYI AND IDI entered into a Second Amendment to Bridge
Note dated October 25, 1996, which, among other things, increased the amount of
the financing available to $415,000, extended the due date of the Bridge Note,
as amended, to November 8, 1996, and provided for the issuance of warrants equal
to 3% of the fully diluted shares of SOV's common stock outstanding should the
parties fail to enter into a permanent financing arrangement with IDI by
November 30, 1996;
WHEREAS, SOV, FYI and IDI entered into a Third Amendment to Bridge
Note dated November __, 1996, which, among other things, increased the amount of
the financing available to $665,000, extended the due date of the Bridge Note,
as amended, to December 9, 1996, and increased the number of warrants issuable
from 3% to 4% of the fully diluted shares of SOV's common stock outstanding
should the parties fail to enter into a permanent financing arrangement with IDI
by December 31, 1996;
WHEREAS, SOV, FYI and IDI entered into a Fourth Amendment to Bridge
Note dated December __, 1996 (the "Fourth Amendment"), which, among other
things, increased the amount of the financing available to $855,000 and extended
the due date of the Bridge Note, as amended, to December 31, 1996;
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WHEREAS, SOV, FYI and IDI desire to further amend the Bridge Note, as
amended, to (i) increase the amount of funding available thereunder, (ii) extend
the due date thereof and (iii) include therein a new provision for the issuance
of Company warrants.
TERMS
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In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
1. Amendment to Bridge Note Amount. The amount of funds that may be
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borrowed pursuant to the Bridge Note, as amended, is hereby amended from up to
$855,000 to up to $991,000.
2. Amendment to Bridge Note Due Date. The due date of the Bridge
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Note, as amended, is hereby amended from December 31, 1996 to January 15, 1997.
3. Issuance of Warrants. Should the parties hereto fail to (i)
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enter into a definitive financing agreement which provides for the repayment by
SOV of the total funding advanced under the Bridge Note, as amended, and (ii)
complete an exchange of warrants held by IDI for substantially all authorized
unreserved and unissued shares of SOV common stock at a conversion ratio agreed
upon by SOV and IDI (this provision to supersede Section 4 of the Fourth
Amendment), in each case on or before January 15, 1997 (the "Determination
Date"), SOV shall issue to IDI warrants to purchase such number of shares of
SOV's common stock equal to eight percent (8%) of the total number of shares of
issued and outstanding SOV common stock on the Determination Date assuming full
dilution thereof. The terms and conditions of such warrants shall be
substantially the same as those set forth in the warrant certificate issued by
SOV to IDI in connection with that certain Note and Preferred Stock Purchase
Agreement dated May 14, 1996.
ARTICLE II.
2.1 Effect of Amendment. Except as expressly provided in Article I
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of this Amendment, nothing shall affect or be deemed to affect any provisions of
the Bridge Note, as amended. Accordingly, interest expense incurred with
respect to the $136,000 advanced pursuant to this Amendment shall accrue as of
the date hereof.
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2.2 Counterparts. This Amendment may be executed in two or more
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counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
2.3 Governing Law. This Amendment shall be governed by and construed
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in accordance with the internal laws of the State of California without giving
effect to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Amendment to be executed by their duly authorized representatives as of the day
and year first above written.
STYLES ON VIDEO, INC.
By: /s/ N. H. Galgas
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CFO
XXXXXXX XXXXX, INC.
By: /s/ N. H. Galgas
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CFO
INTERNATIONAL DIGITAL INVESTORS, L.P.
By: /s/ Xxxxxxx Xxxxxxx
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