EXHIBIT 10.7.2
SECOND MODIFICATION AGREEMENT
THIS SECOND MODIFICATION AGREEMENT ("Agreement"), dated as of October 1,
2001 (this "Modification Agreement"), between BOARDRUSH MEDIA, LLC, a Vermont
limited liability company having an office at 000 Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxx 00000 ("Boardrush"), and j2 GLOBAL COMMUNICATIONS, INC., a
Delaware corporation formerly known as XXXX.XXX, INC. and having an office at
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000 ("j2").
WITNESSETH:
WHEREAS, Boardush and j2 are parties to, or payees under, the following
documents and agreements:
Pledge Agreement, dated as of March 17, 1997 (the "Pledge Agreement"),
among Boardrush, j2, and Xxxxxxxx & Xxxxxxxx, as collateral agent;
Note Agreement, dated as of March 17, 1997 (as amended by a letter
agreement, dated as of June 1, 1999 and as further amended by the
Modification Agreement (defined below), the "Note Agreement"), between
Boardrush and j2;
$2,250,000 Promissory Note, dated March 17, 1997 (as restated on February
26, 1999 and again restated on January 1, 2000, the "Note"), issued by
Boardrush payable to j2;
Consulting Agreement, dated March 17, 1997 (the "Consulting Agreement"),
among Boardrush, j2, Xxxx Xxxxxx, and Xxxx X. Xxxxxx;
Registration Rights Agreement, dated as of March 17, 1997 (the
"Registration Rights Agreement"), among j2, Boardrush, Orchard/j2
Investors, Xxxx Xxxxxx, Xxxx X. Xxxxxx, Xxxxxxx Xxxxxx, and Xxxxx
Xxxxxxxxxx; and
Modification Agreement, dated as of January 1, 2000 (the "Modification
Agreement"), between j2 and Boardrush; and
WHEREAS, effective July 31, 2000, Boardrush paid j2 $760,618 in j2 common
stock, which pursuant to Section 5.3(c) of the Note Agreement resulted in (a)
the provisions of Article VI of the Note Agreement (regarding mandatory
redemption of the Note in the event that the Issuer or its affiliates sells at
least $6 million in value of Common Stock) becoming void and of no further force
or effect and (b) the Pledge Agreement becoming void and of no further force or
effect.
WHEREAS, the parties desire to modify certain terms of the Note Agreement,
the Note, and the Consulting Agreement as more fully set forth below.
NOW, THEREFORE, for full and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Boardrush and j2 hereby agree as
follows:
1. The Extended Term (as defined in the Consulting Agreement and reduced to
December 31, 2002 pursuant to the Modification Agreement) is hereby extended
such that the Extended Term (and the term of the Consulting Agreement) shall
expire on January 1, 2005.
2. Section 5.3(a) of the Note Agreement (as revised by the Modification
Agreement) is hereby deleted in its entirety and replaced with the following:
"5.3. (a) Payment Through Consulting Services. In addition to and not in
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limitation of Section 5.2 above, during the period beginning on March 17,
1999 and ending on January 1, 2005, the Issuer shall effect payment of the
Notes through an extension, for an additional period of approximately five
and one-half years commencing on March 17, 1999 and ending on January 1,
2005 (the "Extended Term"), of the Consulting Agreement entered into between
the Issuer and the Investor simultaneously with the Closing (the "Consulting
Agreement"). Such payment of the Notes through services rendered pursuant to
such Consulting Agreement shall be deemed to include both principal and
interest, with reductions in principal to be calculated as follows: (i)
$37,500 per month during the period commencing March 17, 1999 and continuing
through and including September 30, 2001; (ii) $14,423.08 per month during
the period commencing October 1, 2001 and continuing through and including
December 31, 2004; and (iii) prepayment on July 31, 2000, pursuant to
Section 5.3(b) below, of Common Stock having a Fair Market Value on July 31,
2000 equal to $760,618; provided, however, that the parties agree that the
principal reduction for the each calendar year during the Extended Term
beginning with calendar year 2000 shall not occur on a monthly basis and
shall not be deemed earned until January 1 of the following calendar year,
on which date the reductions in principal for the applicable calendar year
shall be deemed earned in full (for example, effective January 1, 2001, the
$450,000 reduction in principal for calendar year 2000 shall be deemed
earned in full; effective January 1, 2002, the $380,769.24 reduction in
principal for calendar year 2001 shall be deemed earned in full; and
effective January 1, 2003, the $173076.96 reduction in principal for
calendar year 2002 shall be deemed earned in full. Any and all interest on
the Notes accruing during the Extended Term shall be deemed paid in arrears
on the last Business Day of each month occurring during the Extended Term.
Any termination during the Extended Term of Consulting Agreement (with the
single exception of termination thereof for Cause as defined in the
Consulting Agreement), whether as a result of death, disability or other
reason, shall have the effect of accelerating the performance of such
extended Consulting Agreement to the date of termination, and the Notes
shall be deemed to have been prepaid in part in accordance with the second
sentence of this Section 5.3(a) at such time. However, in the case of any
termination during the Extended Term of the Consulting Agreement for Cause
as defined in the Consulting Agreement, there shall be no deemed prepayment
of the Notes (only payments deemed earned in full pursuant to the second
sentence of this Section 5.3(a) shall be applied against the Notes). The
parties further agree that any cash payments made by the Company to the
Issuer under the Consulting Agreement during the Extended Term shall reduce
dollar-for-dollar the deemed principal reduction discussed in the second
sentence of this Section 5.3(a).
3.The parties agree that the Note is hereby amended and restated in its
entirety in the form of a Second Amended and Restated Promissory Note delivered
by Boardrush to j2 concurrently with the execution of this Agreement.
4. Article 2 of the Consulting Agreement is hereby deleted in its entirety
and replaced with the following:
"2. Term. The term of the LLC's consultancy shall, unless otherwise
terminated pursuant to this Agreement, be for a period commencing with the date
hereof and ending on March 17, 1999 ("Initial Term"). If during the period of 15
to 30 days prior to termination of the Initial Term, that certain Note issued by
the LLC in favor of the Company, dated even date hereof (the "Note", provided
that such term also includes any Note or Notes issued upon transfer of exchange
thereof), issued pursuant to the Note Agreement dated even date hereof between
LLC and the Company (the "Note Agreement"), has not been paid in full by the
LLC, the LLC shall have the right, provided that the other requirements of
Section 5.3 of the Note Agreement are complied with, to send a notice to the
Company requesting an extension of the term of this Agreement for an additional
period ending on January 1, 2005, and this Agreement shall be deemed to have
been extended through January 1, 2005 (the "Extended Term"). In the performance
of the foregoing services, the LLC
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agrees to make the Consultants available at the reasonable convenience of
each Consultant for consultations with the Company estimated to average: (a)
three (3) to four (4) days each per week during the initial period of three
(3) months, commencing on the date hereof, (b) two (2) to three (3) days
each per month during the remaining months of the Initial Term, (c) no more
than two (2) days each per month during any month of the Extended Term
through September 30, 2001, and (d) no more than one (1) day each per month
during the balance of the Extended Term. In no event shall either of the
Consultants be obligated to be available for more than: (i) four (4) days
per week during the first three (3) months of the Initial Term of this
Agreement, (ii) three (3) days per month thereafter until the expiration of
the Initial Term, (iii) two (2) days per month during the Extended Term
through September 30, 2001, and (iv) one (1) day per month during the
balance of the Extended Term. For purposes of this Article 2, a "day" shall
be defined as a workday of no more than eight (8) hours."
5. Except as expressly modified herein, the Note Agreement, the Consulting
Agreement, and the Registration Rights Agreement remain unmodified and in full
force and effect. The parties hereto expressly ratify and reaffirm the terms of
these agreements as modified by the Modification Agreement and this Agreement.
6. This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
document.
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IN WITNESS WHEREOF, the parties have caused their respective authorized
representatives to sign this Agreement as of the date first written above and
each of the undersigned hereby represents and warrants that he is authorized to
execute this Agreement on behalf of the respective party to this Agreement and
that this Agreement when executed by such party shall become a valid and binding
obligation enforceable by and against such party in accordance with its terms.
BOARDRUSH MEDIA, LLC
By /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Manager
j2 GLOBAL COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chairman of the Board
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx*
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx*
*Solely for purposes of agreeing to the amendment to the Consulting Agreement
set forth in Section 4 above.
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