Exhibit 10.1
The Shaar Fund, Ltd.
c/x Xxxxxxxx Capital Management
0 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
July 18, 2001
Cross Media Marketing Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the letter agreement, dated December 28, 2000,
as amended as of February 27, 2001 (as so amended, the "December Letter
Agreement"), and the letter agreement dated June 8, 2001 (the "June Letter
Agreement") between Cross Media Marketing Corporation, f/k/a Symposium
Corporation (the "Company") and the undersigned (the "Purchaser"). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the December Letter Agreement and the Securities Agreement (as defined
below).
This letter (the "Amendment") sets forth our agreement as follows:
1. Concurrently herewith, the Company and the Purchaser have entered
into an Agreement (the " Securities Agreement") providing for, among other
things, the issuance by the Company of preferred stock and warrants under
certain circumstances, all as more fully set forth in the Securities Agreement.
The provisions of this Letter Agreement shall in all events be subject to the
provisions of the Securities Agreement.
2. The Company and the Purchaser agree that, at any time during the
Waiting Period (as hereinafter defined), if on the date of a proposed conversion
of the Series A Shares the Current Market Price is less than $1.50 per share,
the Conversion Price will be $1.50 per share (or, if greater, the Conversion
Price that would otherwise be in effect on said date, but for this limitation).
As used herein, "Waiting Period" means the period commencing upon the execution
and delivery of this Amendment by the Company and the Purchaser and ending upon
the earliest to occur of (x) the Merger Closing, (y) the Exchange Closing or (z)
the first anniversary of the date hereof. Accordingly, the proviso at the end of
Section 6.1(a) of the Certificate (as amended by the June Letter Agreement) is
deemed to be further amended to read as follows:
"provided, however, that if the Current Market
Price on any Conversion Date during the Waiting
Period is less than $1.50 (subject to
adjustment for any stock-split or stock
combination or reverse stock split to occur
after the date hereof), then, anything
herein to the contrary notwithstanding, the
Conversion Price on such Conversion Date shall
be the greater of: (1) $1.50 (subject to
adjustment for any stock-split or stock
combination or reverse stock split to occur
after the date hereof) and (2) the Conversion
Price that would otherwise be in effect on
such Conversion Date but for this proviso
(except that for purposes of determining
whether an adjustment is required pursuant to
Section 6.5 hereof, "Conversion Price," as
used in said Section, shall mean the
Conversion Price as in effect without
reference to the foregoing proviso); and
provided, further, that the foregoing proviso
shall not apply if, at any time during the
Waiting Period, the Conversion Price is
adjusted pursuant to the operation of Section
6.5 hereof to a price less than $1.50 (subject
to adjustment for any stock-split or stock
combination or reverse stock split to occur
after the date hereof)."
The penultimate paragraph of Section 6.1(c) is deemed to be amended to
read as follows:
"Within two Business Days of the occurrence of
a Valuation Event (as hereinafter defined)
other than a Valuation Event pursuant to
Subsection (l) below, the Corporation shall
send notice thereof to each Holder.
Notwithstanding anything to the contrary
contained herein, if a Valuation Event occurs
during any Valuation Period, the Holder may
convert some or all of its Series A-1
Preferred Stock, at its sole option, at a
Conversion Price equal to the Current Market
Price on any Trading Day during the Valuation
Period (the "Valuation Period Conversion
Price"); provided, however, that (A) if any
stock split or stock combination or reverse
stock split occurs during the Valuation
Period, the Current Market Price on such day
shall be adjusted, if appropriate, to give
effect thereto; and (B) with respect to any
conversion pursuant to this paragraph that
occurs during the Waiting Period, the
Conversion Price shall be greater of: (x) the
Valuation Period Conversion Price determined
as provided above and (y) $1.50 (subject to
adjustment for any stock-split or stock
combination or reverse stock split to occur
after the date hereof).
3. In order to give effect to the intent of the Agreement, the
Purchaser and the Company agree that the provisions of Section 6.1(b) of the
Certificate shall be deemed amended such that "ten percent (10%)" shall be
substituted for the reference to "five percent (5%)" therein.
4. Notwithstanding the provisions of Sections 6.6 and 6.7 of the
Certificate to the contrary, except as expressly contemplated by the Securities
Agreement, the Company will not give a notice of redemption with respect to, or
redeem, the Series A Shares during the Waiting Period and, subject to the terms
and conditions hereof and of the Security Agreement, the Holder may convert the
Series A Shares at any time during the Waiting Period.
5. Notwithstanding the provisions of Sections 5.1 or Section 6.1 of
the Certificate or Section 4 of the Warrants to the contrary, neither the Merger
Closing nor the performance by the Company of its obligations under the Merger
Agreement shall trigger a liquidation, constitute a Valuation Event or cause an
adjustment pursuant to Section 6.5 of the Certificate or Section 4 of the
Warrants.
6. The definition of "Permitted Dilutive Issuance" in Section 1.1(s)
of the Certificate and Section 1 of the Warrants shall include the issuance by
the Company of up to 1,000,000 shares of Common Stock prior to and/or during the
Waiting Period in transactions exempt from registration under the Securities Act
of 1933, as amended, provided that the issue price is not less than seventy five
percent (75%) of the average of the closing bid and asking prices for the Common
Stock during the five trading days immediately preceding the date on which the
Company issued and sold such Common Stock.
7. The Company hereby confirms its previous notice to the Purchaser
that all notices to be given to the Company pursuant to the Securities Purchase
Agreement or any other agreement between the Company and the Purchaser should be
directed to it at the address set forth above, to the attention of Xxxxxx
Xxxxxxx, Chairman and Chief Executive Officer and that the Company's telephone
number is 000-000-0000 and its facsimile number is 212-457-1202. The Purchaser
hereby confirms its previous notice to the Company that all notices to be given
to the Purchaser pursuant to the Securities Purchase Agreement or any other
agreement between the Company and the Purchaser, including without limitation
notices of redemption pursuant to Section 6.7 of the Certificate, may be
directed to it c/x Xxxxxxxx Capital Management, 2 World Trade Center, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000 and its facsimile number c/x Xxxxxxxx Capital
Management is 000-000-0000.
8. The June Letter Agreement shall terminate and be of no further
force and effect upon execution and delivery of this Amendment by the parties.
It is the intent of the Company and the Purchaser that the provisions of this
Amendment be effective and legally binding upon them in all respects as herein
described commencing immediately upon execution and delivery of this Amendment,
and each of the Company and the Purchaser acknowledges that it has received good
and valid consideration to induce them to execute and deliver this Amendment.
Except as otherwise specifically modified hereby, the rights, remedies and
obligations of the Company and the Purchaser shall be governed by the Securities
Agreement and other instruments and agreements to which the parties are bound.
9. The Purchaser further agrees that it will not transfer any Series
A Shares or Warrants unless and until the proposed transferee has agreed in
writing to be bound by the provisions of the December Letter Agreement, this
Amendment, and the Securities Agreement and causes a copy of such agreement to
be delivered to the Company. Any transfer in violation of the immediately
preceding sentence will be void and will not be recognized by the Company.
10. All references in the December Letter Agreement to "this
Agreement," "herein", "hereof" or the like shall hereinafter be deemed to refer
to the December Letter Agreements as amended hereby. Except as expressly amended
hereby, the December Letter Agreement shall remain in full force and effect as
originally executed and delivered by the
Company and the Purchaser. The provisions of paragraph 7 of the December Letter
Agreement shall apply to this Amendment (and to the December Letter Agreement as
amended hereby) fully and to the same extent as if set forth in their entirety
herein and for this purpose, such provisions are incorporated by reference
herein.
If the foregoing correctly sets forth our understanding, please so
indicate by signing an enclosed counterpart of this Amendment and returning it
to the undersigned, whereupon it will constitute a binding agreement between us.
This Amendment may be executed in counterparts and by the parties hereto in
separate counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
Very truly yours,
THE SHAAR FUND LTD.
By: SHAAR ADVISORY SERVICES N.V.
By: /s/ Win Langeveld
--------------------
Win Langeveld
Managing Director
Accepted and agreed to as of
the date first above written:
CROSS MEDIA MARKETING CORPORATION
By:/s/ Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx
Chairman of the Board and Chief Executive
Officer
