TERRY PHILLIPS Midlothian, Virginia 23113 March 31, 2010
XXXXX
XXXXXXXX
0000 Xxxx
Xxxxxxx
Midlothian,
Virginia 23113
March 31,
2010
Intermezzo
Establishment
Xxxxxxxxxxx
000
9495
Triefen, Liechtenstein
Attn:
Xxxx Xxxxx
Paragon
Investment Fund
c/o
Intermezzo Establishment
Xxxxxxxxxxx
000
9495
Triefen, Liechtenstein
Attn:
Xxxx Xxxxx
Re: Co-Sale
Right
Dear
Xxxx:
Reference
is made to that certain Purchase Agreement (the “Purchase Agreement”)
made by and among SouthPeak Interactive Corporation (“SouthPeak”), and Intermezzo
Establishment and Paragon Investment Fund (the “Sellers”).
Pursuant
to the terms of the Purchase Agreement, SouthPeak shall issue to the Sellers 10
million shares of SouthPeak common stock (the “Shares”) as of the
date hereof. As a material inducement of the Sellers to enter into the Purchase
Agreement, I hereby agree to grant the Sellers certain co-sale rights, as set
forth in Exhibit
A attached hereto, related to future transfers of shares of SouthPeak
common stock held by me.
This
letter agreement may be executed in one or more counterparts, each of which will
be deemed an original copy of this letter agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
This
letter agreement will be governed by and construed in accordance with the
substantive laws of the Commonwealth of Virginia applicable to agreements made
and to be performed entirely within such Commonwealth, without reference to the
conflicts of laws rules of such Commonwealth.
Intermezzo
Establishment
Paragon
Investment Fund
March 31,
2010
Page 2 of
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Very
truly yours,
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Xxxxx
Xxxxxxxx
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ACCEPTED
AND AGREED as of the date first written above:
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INTERMEZZO
ESTABLISHMENT
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By:
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Name:
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Title:
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PARAGON
INVESTMENT FUND
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By:
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Name:
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Title:
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Enclosure
EXHIBIT
A
Co-Sale
Right
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1.
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Transfers by Xxxxx
Xxxxxxxx.
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1.1 Notice of Transfer.
If Xxxxx Xxxxxxxx (“Xxxxxxxx”) proposes
to transfer any of his shares (“Xxxxxxxx Shares”) of SouthPeak Interactive Corporation (“SouthPeak”) common stock, other than pursuant to a sale of
SouthPeak common stock in the public equity markets, then Xxxxxxxx shall
promptly give written notice (the “Notice”) to the
Company and to each of Intermezzo Establishment and Paragon Investment Fund (the
“Sellers”) at least fifteen (15) days prior to the
closing of such transfer. The Notice shall describe in reasonable detail the
proposed transfer, including Xxxxxxxx’
bona fide intention to transfer the Xxxxxxxx Shares, the number of Xxxxxxxx
Shares to be transferred, the nature of such transfer, the bona fide
consideration to be paid and address of each prospective purchaser or
transferee.
1.2 Right of
Co-Sale.
(a) Each Seller shall
have the right, as a condition to such transfer by Xxxxxxxx, exercisable upon
written notice to Xxxxxxxx within five (5) days after receipt of the Notice, to
participate in such transfer of Xxxxxxxx Xxxxxx. Such notice to Xxxxxxxx shall
indicate the number of shares of SouthPeak common stock, up to that number of
shares determined under Section 1.2(b) such
Seller wishes to sell under its right to participate. To the extent one or both
of the Sellers exercise such right of participation in accordance with the terms
and conditions set forth below, the number of Xxxxxxxx Shares that Xxxxxxxx may
sell in the transaction shall be correspondingly reduced based on their pro rata
ownership.
(b) Each Seller may
sell all or any part of that number of shares equal to the product obtained by
multiplying (i) the aggregate number of Xxxxxxxx Shares covered by the Notice by
(ii) a fraction the numerator of which is the number of shares of SouthPeak
common stock issued as of the date hereof and held by such Seller at the time of
the Notice and the denominator of which is the total number of Xxxxxxxx Shares
plus the number of shares of SouthPeak common stock issued as of the date hereof
and held by both Sellers at the time of the Notice. If both Sellers do not elect
to sell their shares of SouthPeak common stock proposed to be transferred within
said five (5) day period, then Xxxxxxxx shall promptly notify in writing the
Seller who does so elect and shall offer such Seller the additional right to
participate in the transfer of such additional Xxxxxxxx Shares proposed to be
transferred on the same percentage basis as set forth above in this Section 1.2(b). The
Sellers shall have five (5) days after receipt of such notice to notify Xxxxxxxx
in writing of its election to sell all or a portion thereof of the unsubscribed
shares.
(c) Each Seller who
elects to participate in the transfer pursuant to this Section 1.2 (a “Co-Sale
Participant”) shall effect its
participation in the transfer by promptly delivering to Xxxxxxxx for transfer to
the prospective purchaser one or more certificates, properly endorsed for
transfer, which represent the number of shares of SouthPeak common stock which
such Co-Sale Participant elects to sell.
(d) The stock certificate or certificates that the
Co-Sale Participant delivers to Xxxxxxxx pursuant to Section 1.2(c) shall
be transferred to the prospective purchaser in consummation of the transfer of
SouthPeak common stock pursuant to the terms and conditions specified in the
Notice, and Xxxxxxxx shall concurrently therewith remit to such Co-Sale
Participant that portion of the sale proceeds to which such Co-Sale Participant
is entitled by reason of its participation in such sale. To the extent that any
prospective purchaser or purchasers prohibits such assignment or otherwise
refuses to purchase shares or other securities from a Co-Sale Participant
exercising its rights of co-sale hereunder, Xxxxxxxx shall not sell to such
prospective purchaser or purchasers any Xxxxxxxx Shares unless and until,
simultaneously with such sale, Xxxxxxxx shall purchase such shares or other
securities from such Co-Sale Participant on the same terms and conditions
specified in the Notice.
(e) The exercise or
non-exercise of the rights of any Seller hereunder to participate in one or more
transfers of Xxxxxxxx Shares shall not adversely affect such Seller’s
right to participate in subsequent transfers of Xxxxxxxx Shares
hereunder.
(f) To the extent
that the Sellers do not elect to participate in the transfer of Xxxxxxxx Shares
subject to the Notice, such Xxxxxxxx may, not later than seventy-five (75) days
following delivery of the Notice, enter into an agreement providing for the
closing of the transfer of such Xxxxxxxx Shares covered by the Notice within
thirty (30) days of the date of such agreement on terms and conditions not
materially more favorable to the transferor than those described in the Notice.
Any proposed transfer on terms and conditions materially more favorable to the
transferor than those described in the Notice, as well as any subsequent
proposed transfer of any Xxxxxxxx Shares, shall again be subject to the co-sale
rights of the Sellers and shall require compliance by Xxxxxxxx with the
procedures described in this Section
1.2.
2. Exempt Transfers. The
co-sale rights of the Sellers set forth in Section 1 above shall
not apply to any transfer without consideration to Xxxxxxxx’ ancestors,
descendants, siblings, or spouse, or the Xxxxxxxx’ spouse’s ancestors,
descendants or siblings, or to or from trusts, family limited partnerships or
family limited liability companies for the benefit of such persons or Xxxxxxxx;
provided such transfer qualifies as a non-reportable gift for U.S. federal
income tax purposes; and provided further that Xxxxxxxx shall inform each Seller
of such transfer prior to effecting it.
