FUND.COM INC. New York, New York 10004
Exhibit
10.1
XXXX.XXX
INC.
00 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
December 28, 2009
IP
GLOBAL INVESTORS LTD.
000 X.
Xxxxx
Xxxxxxx
Xxxxx, XX 00000
Attn: Xxxxxxx
XxXxxxx, President
EQUITIES
MEDIA ACQUISITION CORP., INC.
Xxx
Xxxxxx 00
0000
Xxxx-Xxxxxx
Xxxxxxxxxxx
Re: Class B
Common Stock and Note of Xxxx.xxx Inc.
Gentlemen:
Reference
is made to the revolving credit loan agreement, dated as of July 27, 2009 (the
“Loan
Agreement”), among Xxxx.xxx Inc. (“Xxxx.xxx”) and IP Global Investors Ltd
(“IPG”) and
Equities Media Acquisition
Corp. Inc. (“EMAC” and with IPG,
collectively, the “Lenders”). This
will confirm that through and including the date hereof, the Lenders have paid
in cash to Xxxx.xxx the aggregate sum of $2,500,000 which sum is evidenced by a
$2,500,000 one year senior secured convertible note of Xxxx.xxx issued in August
2009 (the “Note”).
This
letter agreement (“Agreement”) will
acknowledge that:
(a)
Xxxx.xxx.: (i) is currently unable to pay the Note, when due, (ii) is currently
in default under the terms of the Note, (iii) requires additional working
capital; and (iv) is seeking additional third party financing to enable it to
make a potential investment in Weston Capital LLC;
(b) the
Lenders or their assigns have the right to convert the Note, at a conversion
price of $0.21 per share, into an aggregate of 11,904,761 shares of the Class B
Common Stock of Xxxx.xxx (the “Class B Common
Stock”);
(c) EMAC
is the record and beneficial owner of 6,387,665 shares of Class B Common
Stock;
(d) the
holders of Class B Common Stock have the right to convert each such share of
Class B Common Stock into ten (10) shares of Class A Common Stock of Xxxx.xxx
(the “Class A Common
Stock”);
(e) as
at the date hereof, the average closing market prices of Xxxx.xxx Class A Common
Stock, as traded on the FINRA Over-the-counter Bulletin Board (“OTCBB”) during the
ten (10) trading days prior to December 28, 2009 is approximately $0.905 per
share;
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(f) the
Lenders have advised Xxxx.xxx that IPG has assigned a total of $694,050 original
principal amount of the Note to (i) Recovery Capital, Inc. - $315,000 principal
amount of the Note, (ii) TAG Virgin Islands, Inc. - $189,000, principal amount
of the Note, (iii) Bleecker Holdings LLC - $91,476 principal amount of the Note,
(iv) Kingwood Capital Partners LLC - $91,476 principal amount of the Note, (v)
the Xxxxxx Family Trust - $5,250 principal amount of the Note; and (vi) Xxxx
Xxxxx, or his Affiliate $1,848 principal amount of the Note (collectively, the
“Note
Assignees”); and
(g) All
unpaid interest and fees that has accrued on the original $2,500,000 principal
amount of the Note has not been assigned to any of the Note Assignees, and is
retained exclusively by the Lenders.
The Lenders have advised that: (i)
Recovery Capital, Inc. will convert its $315,000 principal amount of assigned
Note into an aggregate of 15,000,000 shares of Class A Common Stock of Xxxx.xxx;
(ii) TAG Virgin Islands, Inc. will convert its $189,000 principal amount of
assigned Note into an aggregate of 9,000,000 shares of Class A Common Stock of
Xxxx.xxx; and (iii) the Xxxxxx Family Trust will convert its $5,250 principal
amount of assigned Note into an aggregate of 250,000 shares of Class A Common
Stock of Xxxx.xxx. By its execution of this Agreement, Xxxx.xxx does
hereby agree, upon receipt of conversion notices by such Note Assignees, it will
promptly cause to be issued the appropriate number of shares of Class A Common
Stock to such Note Assignees.
Xxxx.xxx has been advised by potential
investors that the existence of one or more events of default under the Note,
which is secured by substantial assets of Xxxx.xxx, would have a material
adverse effect on the value of the public market price of Xxxx.xxx Class A
Common Stock, and represent a material detriment to any such investor(s)
agreeing to provide additional capital to Xxxx.xxx through the purchase of
additional equity or equity type securities.
Accordingly, Xxxx.xxx has requested
that each of IPG, EMAC and certain of the Note Assignees who have executed this
Agreement (collectively, the “Noteholder Parties”),
agree to the terms and conditions set forth in this Agreement. By
their execution of this Agreement, each of the Noteholder Parties do hereby
covenant and agree to the following terms and conditions:
1. EMAC
Conversion. EMAC hereby agrees that, without the prior written
consent of the board of directors of Xxxx.xxx (the “Board of Directors”),
EMAC shall not convert any of its shares of Class B Common Stock into Class A
Common Stock, until December 31, 2011.
2. Exchange of
Notes.
(a) On
or before January 15, 2010, those Noteholder Parties set forth in Section 3(b) below
shall exchange an aggregate of $840,000 principal amount of the Notes for
400,000 shares of Xxxx.xxx Series A convertible preferred stock (the “Xxxx.xxx Series A Preferred
Stock”). Such Xxxx.xxx Series A Preferred Stock
shall:
(i) not
pay a dividend;
(ii) have
a stated or liquidation value of $100.00 per share;
(iii) be
convertible by the holder(s) at any time at a conversion price of $1.50 per
share;
(iv) vote,
together with the Class B Common Stock on an “as converted basis;
and
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(v) contain
the other rights privileges and designations, including anti-dilution
adjustments as are set forth in the Certificate of Designations, annexed hereto
as Exhibit A
and made a part hereof.
(b) The
aggregate $840,000 original principal amount of Notes exchanged for 400,000
shares of Xxxx.xxx Series A Preferred Stock (the “Exchange Notes”)
shall be exchanged, as follows:
(i) IPG
shall exchange $655,200 original principal amount of the Exchange Notes, or 78%
of such Exchange Notes;
(ii) Bleecker
Holdings LLC shall exchange $91,476 original principal amount of the Exchange
Notes, or 10.89% of such Exchange Notes;
(iii) Kingswood
Capital Partners LLC shall exchange $91,476 original principal amount of the
Exchange Notes, or 10.89% of such Exchange Notes; and
(iv)
Xxxx Xxxxx or his affiliate shall exchange $1,848 original principal amount of
the Exchange Notes, or 0.22% of such Exchange Notes.
(c) Except
in connection with a sale of all or substantially all of the assets or
securities of Xxxx.xxx to any unaffiliated third person, firm or corporation
(whether by merger, asset sale, tender offer, consolidation or like combination)
in any one or a series of transactions (a “Sale of Control”),
without the prior written consent of the Board of Directors, prior to December
31, 2011, the Noteholder Parties shall not convert more than twenty-five percent
(25%) of the remaining $1,150,750 principal amount of the Note and any interest
and fees accrued thereon (the “Remaining Balance”),
into shares of Class A Common Stock of Xxxx.xxx; provided, that the Noteholders
may convert all or any portion of the Remaining Balance into shares of Class B
Common Stock of Xxxx.xxx at any time or from time to time prior to December 31,
2011.
3. Waiver of Prior Defaults and
Extension of Maturity Date.
(a) By
their execution of this Agreement, each of the Lenders and each of the Lenders
do hereby agree to waive all prior defaults by Xxxx.xxx under the Notes and the
Loan Agreement; provided that such waivers shall not constitute a waiver of any
subsequent default or other event that may occur following the date hereof,
which default or event, with the giving of notice, the passage to time or both,
would constitute a default or event of default under the Note or the Loan
Agreement.
(b) By
their execution of this Agreement, each of the Lenders do hereby agree to extend
the Maturity Date of the Remaining Balance of the Notes to December 31,
2011.
4. Issuance of Xxxx.xxx Series
A Preferred Stock. The 400,000 shares of Xxxx.xxx Series A
Preferred Stock shall be issued as follows:
(a) IPG
shall receive 312,000 shares of Xxxx.xxx Series A Preferred Stock, or 78% of
such shares;
(b) Bleecker
Holdings LLC shall receive 43,560 shares of Xxxx.xxx Series A Preferred Stock,
or 10.89% of such shares;
(c) Kingswood
Partners LLC shall receive 43,560 shares of Xxxx.xxx Series A Preferred Stock,
or 10.89% of such shares; and
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(d) Xxxx
Xxxxx or his affiliate shall receive 880 shares of Xxxx.xxx Series A Preferred
Stock, or 0.22% of such shares
5. Additional agreement of the
Parties. Each of Xxxx.xxx, the Lenders, and the other parties
signatories hereto (collectively, the “Parties”) do hereby
agree, as follows:
5.1 Waivers. The
waiver of a breach of this agreement or the failure of any Party hereto to
exercise any right under this agreement shall in no way constitute waiver as to
future breach whether similar or dissimilar in nature or as to the exercise of
any further right under this agreement.
5.2 Amendment. This
agreement may be amended or modified only by an instrument of equal formality
signed by the Parties or the duly authorized representatives of the respective
parties.
5.3 Assignment. This
agreement is not assignable except by operation of law or agreement of the
Parties.
5.4 Notice. Until
otherwise specified in writing, the mailing addresses and fax numbers of the
parties of this agreement shall be made to the addresses set forth in this
Agreement. Any notice or statement given under this agreement shall
be deemed to have been given if sent by registered mail addressed to the other
party at the address indicated above or at such other address which shall have
been furnished in writing to the addressor.
5.5 Governing
Law. This agreement shall be construed, and the legal
relations between the parties determined, in accordance with the laws of the
State of Delaware, thereby precluding any choice of law rules which may direct
the application of the laws of any other jurisdiction.
5.6 Publicity. No
publicity release or announcement concerning this agreement or the transactions
contemplated hereby shall be issued by either party hereto at any time from the
signing hereof without advance approval in writing of the form and substance by
the other party.
5.7 Entire
agreement. This Agreement contains the entire agreement among
the Parties with respect to the transactions contemplated hereby, and supersedes
all prior agreements, written or oral, with respect hereof.
5.8 Headings. The
headings in this agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
5.9 Severability of
Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or provision of this
agreement shall in no way affect the validity or enforcement of any other
provision or any part thereof.
5.10 Counterparts. This
agreement may be executed in any number of counterparts, each of which when so
executed, shall constitute an original copy hereof, but all of which together
shall consider but one and the same document.
5.11 Binding
Effect. This Agreement shall be binding upon the Parties
hereto and inure to the benefit of the Parties, their respective heirs,
administrators, executors, successors and assigns.
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If the
foregoing accurately represents the substance of our mutual agreement and
understanding, please so indicate by executing and returning a copy of this
agreement in the space provided below.
Very
truly yours,
XXXX.XXX
INC.
By: /s/
Xxxxxxx Webster____________________
Xxxxxxx Xxxxxxx
President and CEO
IP
GLOBAL INVESTORS LTD.
By: /s/
Xxxxxxx McEnroe__________________
Xxxxxxx XxXxxxx, President
EQUITIES
MEDIA ACQUISITION CORP. INC.
By: /s/ Arie
Jan van Roon___________________
Arie Xxx xxx Xxxx,
President
BLEECKER
HOLDINGS LLC
By: /s/
Xxxxxx X. Bianco______________________
Xxxxxx X. Xxxxxx,
Member/Manager
KINGSWOOD
CAPITAL PARTNERS LLC
By: /s/ Xxxx
Xxxxx Weiss____________________
Xxxx Xxxxx Xxxxx,
Manager/Member
/s/ Xxxx
Levin_____________________________
Xxxx Xxxxx
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