EXHIBIT 10.20a
Thursday, September 20, 1996
THINK New Ideas, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxx
Dear Xx. Xxxxxxx:
This letter agreement (the "Agreement") confirms the understanding between
THINK New Ideas, Inc., a Delaware corporation ("Think"), and Xx. Xxx Xxxxxxxx
and Xx. Xxxxx X. Xxxxxxxx in connection with the restructuring of the debt owed
by Think to Xx. Xxxxx X. Xxxxxxxx and Xx. Xxx Xxxxxxxx, respectively, on the
terms and subject to the conditions set forth herein.
1. Xx. Xxxxx X. Xxxxxxxx shall forgive, effective as of June 30,
1996, all debt and accrued salary owed by Think to Xx. Xxxxx X. Xxxxxxxx
(including $1,048,000 loaned to NetCube Corporation (previously Anzen
Corporation), a Delaware corporation, and $180,000 that was due from
NetCube Corporation, a New Jersey corporation), except as outlined in
paragraph 3 below.
2. (A) Think shall issue a note in the principal amount of $288,000
to Xx. Xxx Xxxxxxxx, to accrue interest of 8% per annum from October 1,
1996, payable on the earliest of (1) immediately prior to an initial public
offering of securities of Think, (2) the issuance by Think in a private
offering of securities of Think after September 1, 1996 to investors the
proceeds of which exceed $3,000,000, (3) the sale of 50% or more of the
assets or properties of Think or (4) March 31, 1998. The note will be
convertible in full at the option of Xx. Xxx Xxxxxxxx at the earlier of (i)
January 31, 1998 or (ii) upon the occurrence of an event described in
clauses (2) or (3) into shares of Common Stock of Think at a per share
price of the price per share in the initial public offering, or, if no
initial public offering has occurred at the time of conversion, at a per
share of $5.00, subject to adjustments in the case of recapitalization,
reorganization, stock splits, stock dividends and similar events. Think
shall register such shares with the Securities and Exchange Commission
("SEC") as soon as reasonably practicable after any of its shares of Common
Stock are registered with the SEC; and (B) Think shall issue a note in the
principal amount of $515,760 to Xx. Xxx Xxxxxxxx, to accrue interest of 8%
per annum from October 1, 1996, payable on the earliest of (1) the issuance
by Think in a private offering of securities of Think after September 1,
1996 to investors the proceeds of which exceed $3,000,000, (2) a public
offering of securities of Think following an initial public offering of
securities of Think, (3) the sale of 50% or more of the assets or
properties of Think or (4) March 31, 1998. The note will be convertible in
full at the option of Xx. Xxx Xxxxxxxx at the earlier of (i) January 31,
1998 or (ii) upon the occurrence of an event described in clauses (1), (2)
or (3) into shares of Common Stock of Think at a per share price of the
price per share price in the initial public offering, or, if no initial
public offering has occurred at the time of conversion, at a per share
price of $5.00,
THINK New Ideas, Inc.
September 20, 1996
Page 2
subject to adjustments in the case of recapitalization, reorganization,
stock splits, stock dividends and similar events. Think shall register such
shares with the SEC promptly as soon as reasonably practicable any of its
shares of Common Stock are registered with the SEC; and
3. Think shall issue a note in the principal amount of $132,000 to
Xx. Xxxxx X. Xxxxxxxx, to accrue interest of 8% per annum from July 1,
1996, payable on the earliest of (1) immediately prior to an initial public
offering of securities of Think, (2) the issuance by Think in a private
offering of securities of Think after September 1, 1996 to investors the
proceeds of which exceed $3,000,000, (3) the sale of 50% or more of the
assets or properties of Think or (4) March 31, 1998. The note will be
convertible in full at the option of Xx. Xxxxx X. Xxxxxxxx at the earlier
of (i) January 31, 1998 or (ii) upon the occurrence of an event described
in clauses (2) or (3) into shares of Common Stock of Think at a per share
price of the price per share in the initial public offering, or, if no
initial public offering has occurred at the time of conversion, at a per
share price of $5.00, subject to adjustments in the case of
recapitalization, reorganization, stock splits, stock dividends and similar
events. Think shall register such shares with the SEC as soon as reasonably
practicable after any of its shares of Common Stock are registered with the
SEC.
4. Think shall pay or reimburse Xx. Xxxxx X. Xxxxxxxx and Xx. Xxx
Xxxxxxxx for all their expenses, including legal fees and expenses of
counsel, rising in connection the restructuring of the debt owed to them by
Think and the registration of shares of Common Stock of Think to be issued
upon conversion of the notes described in paragraphs 2 and 3 above;
provided that, Think is not required to pay for (1) any such expenses
incurred in connection with the preparation of this letter agreement in
excess of $2,000 and (2) for the legal fees of counsel to Xx. Xxxxx X.
Xxxxxxxx and Xx. Xxx Xxxxxxxx in connection with the review of the notes
described in paragraphs 2 and 3 above to be prepared by counsel to Think.
5. The notes described in paragraphs 2 and 3 above shall not be
convertible during the pendency of any registration statement filed by
Think under the Securities Act of 1933, as amended (the "1933 Act"), if in
the opinion of counsel for Think such conversion would not qualify for an
exemption under the 1933 Act or would create integration issues that
adversely affect Think, unless the shares into which the notes are
convertible are registered under the 1933 Act.
6. Each of Xx. Xxxxx X. Xxxxxxxx and Xx. Xxx Xxxxxxxx agrees to
execute a lock-up agreement with the underwriters in the initial public
offering of securities of Think with respect to the sale of the shares into
which the notes are convertible at the
THINK New Ideas, Inc.
September 20, 1996
Page 3
same terms as all the other stockholders, provided that the initial public
offering of securities of Think occurs prior to December 31, 1996.
If the foregoing terms correctly set forth our agreement, please confirm
this by signing and returning to Xx. Xxxxx X. Xxxxxxxx the duplicate copy of
this letter. Thereupon this letter, as signed in counterpart, shall constitute
our agreement on the subject matter herein.
/s/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx
/s/ Xxxxx X. Xxxxxxxx
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Xx. Xxxxx X. Xxxxxxxx
Confirmed and Agreed to:
THINK NEW IDEAS, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
