Exhibit 10.1
SENDTEC ACQUISITION CORP.
000 Xxxxxxxxx Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
RELATIONSERVE MEDIA, INC.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
February 3, 2006
To the Purchasers Under
The Securities Purchase Agreement
Dated as of October 31, 2005
Re: Securities Purchase Agreement dated as of October 31, 2005
Ladies and Gentlemen:
Reference is made to the Securities Purchase Agreement (the "PURCHASE
AGREEMENT"), dated as of October 31, 2005, among SendTec Acquisition Corp., a
Delaware corporation ("STAC"), RelationServe Media, Inc., a Delaware corporation
(the "COMPANY"), and each purchaser identified on the signature pages thereto
(each, including its successors and assigns, a "PURCHASER" and collectively the
"PURCHASERS") and Christiana Corporate Services, Inc., a Delaware corporation,
in its capacity as administrative agent for the Purchasers (together with its
successors and assigns in such capacity, the "Agent"), and the transactions
contemplated thereby. Capitalized terms used in and not otherwise defined in
this letter shall have the meanings ascribed to them in the Purchase Agreement.
In connection with and effective upon the closing of the Consolidation to be
effected today pursuant to the Purchase Agreement, STAC, the Company and the
Purchasers agree as follows:
1. STAC has not and will not satisfy the covenants set forth in Section 4.21(b)
of the Purchase Agreement to have minimum EBITDA for the fourth quarter of 2005
and fiscal year 2005 of $1,725,000 and $5,200,000 and therefore, the minimum
EBITDA for the fourth quarter shall be $650,000 and for fiscal year 2005 shall
be $4,350,000. Further, following the closing of the Consolidation, the
financial covenants under Section 4.21 will be of no further force and effect.
2. The Company financial covenant targets set forth in Schedules 4.22(a), (b)
and (c) of the Purchase Agreement are restated in their entirety as set forth in
the amended Schedules 4.22(a), (b) and (c) attached to this letter agreement.
3. Sunrise Equity Partners, L.P., has indicated its interest in a subscription
and purchase of $750,000.00 of Company Common Stock (500,000 shares at $1.50 per
share) to close contemporaneously with the Consolidation ("Investment") pursuant
to a stock purchase agreement, including the provision of rights to "piggy-back"
registration of such Company Common Stock to be effected upon the filing of the
Registration Statement. The use of proceeds from the Investment will be to
repurchase approximately an equal amount of shares owned by Xxxxx Xxxxxx or his
affiliates as required in the Consolidation. The Required Purchasers hereby
consent to the Investment upon the terms and conditions described herein with
such immaterial changes and revisions as the officer executing the same shall
determine, PROVIDED, HOWEVER, that there shall be no change in the number of
shares or price of the Investment. The Required Purchasers also waive compliance
with the provisions of Section 4.15, "Participation in Future Financing," and
Section 4.16, "Subsequent Equity Sales" solely with respect to the Investment.
4. In addition, for the absence of doubt and for the purpose of satisfaction of
any covenants, conditions, or restrictions in or relating to the Purchase
Agreement, or applicable to the Company or STAC, as now in effect or as may
hereafter be modified or amended, the amount of any non-cash charges associated
with the Investment shall be included (added back) in any calculations of such
amounts.
5. (a) In consideration of the Purchasers (i) forbearing to call a covenant
default or breach of Section 4.21(b) of the Purchase Agreement, (ii) agreeing to
amend Schedules 4.22(a), (b) and (c) of the Purchase Agreement and (iii)
consenting to the Investment and waiving the provisions of Sections 4.15 and
4.16, the Company shall issue 525,000 shares (the "Shares") of its common stock,
par value $0.001 per share (the "Common Stock"), pro rata to the Purchasers in
accordance with their respective ownership of the principal amounts of the STAC
Debentures, at the closing of the Consolidation being effected today, as set
forth next to their name on the signature page hereto.
(b) Certificates for the Shares, duly registered in the names of the
Purchasers and containing the necessary restrictive legends, shall be delivered
to Xxxxxxxx & Xxxxxxxx LLP by the close of business on the Consolidation Date
for delivery to the respective Purchasers.
(c) The Shares shall be included in the "Registrable Securities" as
defined in and pursuant to the Company Registration Rights Agreement, the form
of which is attached as Exhibit D to the Purchase Agreement, and the final
version of which shall be executed and delivered in connection with the closing
of the Consolidation.
6. Except as specifically set forth in this letter agreement, the covenants,
terms and provisions of the Purchase Agreement and the other Transaction
Documents remain in full force and effect and the Purchasers have not waived, or
agreed to the amendment of, any other provisions thereof. In no event shall this
letter, any other action undertaken pursuant to the Purchase Agreement or the
other Transaction Documents, or any inaction by Agent or the Purchasers
constitute (i) a waiver, estoppel or agreement to forbear (except as
specifically set forth herein) with respect to Agent's and the Purchasers'
rights, defenses, remedies, or privileges at law or in equity under the Purchase
Agreement, the other Transaction Documents or otherwise; or (ii) a waiver of any
Default or Event of Default under the STAC Debentures. No delay by Agent or the
Purchaser in exercising any of their respective rights or remedies shall operate
as a waiver of any rights or remedies that Agent or the Purchasers may have.
This letter agreement shall be effective upon execution and delivery
thereof by STAC, the Company and the holders of 75% of the principal amount of
the Debentures.
SENDTEC ACQUISITION CORP.
By: /s/ Xxxx Xxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: CEO
RELATIONSERVE MEDIA, INC.
By: /s/ Xxxxx XxXxxxxx
--------------------------------------------
Name: Xxxxx XxXxxxxx
Title: CEO
AGREED AND ACCEPTED SHARES OF RSVM COMMON TO BE RECEIVED
LB I GROUP INC. 150,215 shares
($10 million principal amount)
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: SVP 3 Feb. 2006
ALEXANDRA GLOBAL MASTER FUND, LTD. 75,107 shares
($5 million principal amount)
By:
-----------------------------------
Name:
Title:
CAMOFI MASTER LDC 30,043 shares
($2 million principal amount)
By: /s/
-----------------------------------
Name:
Title: Director
JGB CAPITAL, L.P. 11,266 shares
($750 million principal amount)
By: JGB Management Inc, as General Partner
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: President JGB Management, Inc., as General Partner
MELLON HBV MASTER U.S. EVENT
DRIVEN FUND L.P. 22,532 shares
($1.5 million principal amount)
By: /s/
-----------------------------------
Name:
Title: Managing Director
MELLON HBV MASTER GLOBAL EVENT 67,597 shares
DRIVEN FUND LP
($4.5 million principal amount)
By: /s/
-----------------------------------
Name:
Title: Managing Director
PALISADES MASTER FUND LP 60,086 shares
($4 million principal amount)
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: General Partner
PORTSIDE GROWTH AND OPPORTUNITY FUND 30,043 shares
($2 million principal amount)
By: /s/
-----------------------------------
Name:
Title:
By: 31,004 shares
-----------------------------------
Xxxx Xxxxxx
($200,000 principal amount)
SDS CAPITAL GROUP 60,086 shares
SPC LTD.
($4 million principal amount)
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Director
RHP MASTER FUND, LTD/ 15,021 shares
($1 million principal amount)
By: /s/
-----------------------------------
Name:
Title:
