SECOND AMENDMENT TO INVESTMENT AGREEMENT
Exhibit 10.1
SECOND AMENDMENT TO INVESTMENT AGREEMENT
This Second Amendment (this “Amendment”) to the Investment Agreement by and between FX
Real Estate and Entertainment Inc., a Delaware corporation (the “Company”), and The Xxxx
Alternative Fund, L.P. and The Xxxx Alternative Parallel Fund, L.P. (each an “Investor” and
collectively, the “Investors”) is made and effective as of May 13, 2008. All capitalized
terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the
Investment Agreement (as defined below).
RECITALS
WHEREAS, the Company and the Investors entered into that certain Investment Agreement, dated
as of January 9, 2008, as amended by the First Amendment thereto effective as of March 31, 2008 (as
amended, the “Investment Agreement”); and
WHEREAS, the Company and the Investors desire to make certain amendments to the Investment
Agreement pursuant to Section 9.4 thereof as set forth herein.
NOW, THEREFORE, for the consideration set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Amendment to Section 4.3(c) of the Investment Agreement. Section 4.3(c)(iii) of the
Investment Agreement is hereby amended to read in its entirety as follows:
“(iii) Right of the Company to Cause Conversion to One Share of Common
Stock. At any time beginning on and after the date on which the Investors shall
cease to own more than fifteen percent (15%) of the Investor Shares, the Company shall
have the right to cause the Special Preferred Stock to be converted into one (1) share
of Common Stock, subject to appropriate adjustments to give effect to stock splits,
stock dividends, recapitalizations and similar transactions affecting the Company’s
capital.”
2. Amendment to Section 4.3(c) of the Investment Agreement. Section 4.3(c) of the
Investment Agreement is hereby amended by inserting new subsection (v) immediately following
subsection (iv) appearing in said Section:
“(v) Board Observer Rights. As long as the Investors continue to own more than
fifteen percent (15%) of the Investor Shares, the Designated Investor shall be entitled at
its option to (but shall not be obligated to) designate, by written notice to the Company,
one individual as an observer to the Company’s board of directors, and all committees of the
board of directors (the “Board Observer”). The Board Observer shall, subject to the
last sentence of this subsection and any restrictions of The Nasdaq Global Market or
applicable law, be entitled to attend all meetings of the Company’s board of directors and
any committees thereof, to be given advance notice of all meetings not later than the time
notice is given to any member of the board of directors and to receive upon issuance to the members of the board of directors or any committees thereof any materials prepared
for the members of the board of directors or committees thereof (but shall have no right
to
participate in such meetings). The Board Observer shall, subject to the last sentence of
this subsection and any restrictions of The Nasdaq Global Market or applicable law, be
afforded to the same rights and privileges as the other members of the Company’s board of
directors, other than the right to vote on matters brought before the members, including,
without limitation, rights to indemnification, insurance, notice, information and the prompt
reimbursement of expenses (but not the payment of directors fees). Notwithstanding anything
to the contrary set forth in this subsection or elsewhere in this Agreement, the Company’s
board of directors and each committee thereof shall have the absolute and unfettered right,
exercisable at its sole and absolute discretion, to exclude such Board Observer from any
meeting thereof.”
3. Amendment to Section 4.4 of the Investment Agreement. Section 4.4 of the Investment
Agreement is hereby amended to read in its entirety as follows:
“(b) As long as the Investors continue to own more than fifteen percent (15%) of the
Investor Shares, the Designated Investor shall be entitled at its option to (but shall not
be obligated to) designate, by written notice to the Company, a Board Observer. The Board
Observer shall, subject to the last sentence of this subsection and any restrictions of The
Nasdaq Global Market or applicable law, be entitled to attend all meetings of the Company’s
board of directors and any committees thereof, to be given advance notice of all meetings
not later than the time notice is given to any member of the board of directors and to
receive upon issuance to the members of the board of directors or any committees thereof any
materials prepared for the members of the board of directors or committees thereof (but
shall have no right to participate in such meetings). The Board Observer shall, subject to
the last sentence of this subsection and any restrictions of The Nasdaq Global Market or
applicable law, be afforded to the same rights and privileges as the other members of the
Company’s board of directors, other than the right to vote on matters brought before the
members, including, without limitation, rights to indemnification, insurance, notice,
information and the prompt reimbursement of expenses (but not the payment of directors
fees). Notwithstanding anything to the contrary set forth in this subsection or elsewhere in
this Agreement, the Company’s board of directors and each committee thereof shall have the
absolute and unfettered right, exercisable at its sole and absolute discretion, to exclude
such Board Observer from any meeting thereof.”
4. Amendment to Section 5.2 of the Investment Agreement. Section 5.2(b) of the Investment
Agreement is hereby amended to read in its entirety as follows:
(b) Certificate. The Investors shall have delivered to the Company a
certificate dated as of the date of the closing certifying that (i) the Investors are
authorized to enter into the Investment Agreement and to consummate the transactions
contemplated thereby and that the person signing the Investment Agreement and the documents
contemplated thereby on behalf of the Investors is authorized to do so; and (ii) the
condition set forth in Section 5.2(a) hereof has been satisfied.
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5. Amendment to Section 8 of the Investment Agreement. Section 8 of the Investment
Agreement is hereby amended by deleting the definition of “Board Observer” appearing
therein in its entirety and inserting the following new definition in lieu thereof:
“Board Observer” has the meaning assigned to it in Section 4.3(c)(v)
hereof.”
6. Effect of Amendment. The Company hereby represents and warrants to the Investors that
each of the Company’s representations and warranties set forth in the Investment Agreement is true
and correct in all respects as of the date hereof as though made on as of the date hereof, except
for each of the Company’s representations and warranties set forth in Sections 2.5, 2.12 and 2.15
of the Agreement to the extent so specifically reported in the Company’s Annual Report on Form
10-K, as amended, for the year ended December 31, 2007. Except as expressly set forth in this
Amendment, the Investment Agreement shall remain in full force and effect as originally written,
and shall constitute the legal, valid, binding and enforceable obligation of the parties thereto.
7. Governing Law; Jurisdiction; Venue; Process. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York without regard to any choice of law
or conflict of law provision or rule that would cause the application of the laws of any
jurisdiction other than the State of New York. Each party hereby irrevocably submits, for itself
and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York
located in New York, New York or the United States District Court for the Southern District of New
York, and any appellate court from any such court (as applicable, a “New York Court”), in
any suit, action or proceeding arising out of or relating to this Amendment, or for recognition or
enforcement of any judgment resulting from any such suit, action or proceeding, and each party
hereby irrevocably and unconditionally agrees that all claims in respect of any such suit, action
or proceeding may be heard and determined in the New York Court. Each party hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do so, (i) any
objection which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Amendment in the New York Court, (ii) the defense of
an inconvenient forum to the maintenance of such suit, action or proceeding in any such court, and
(iii) the right to object, with respect to such suit, action or proceeding, that such court does
not have jurisdiction over such party. Each party irrevocably consents to service of process in any
manner permitted by law. The foregoing consents to jurisdiction and service of process shall not
constitute general consents to service of process in the State of New York for any purpose except
as relates to this Amendment, and shall not be deemed to confer rights on any Person other than the
respective parties to this Amendment.
8. Execution in Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be considered an original instrument, but all of which shall be considered one
and the same agreement, and shall become binding when one or more counterparts have been signed by
each of the parties hereto and delivered to the parties. Copies of executed counterparts
transmitted by facsimile or other electronic transmission shall be considered original executed
counterparts for the purposes of this Amendment, provided that receipt of copies of such
counterparts is confirmed. Originals of any counterparts transmitted by facsimile or other
electronic transmission shall be promptly provided to the other parties hereto.
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7. Headings. The headings in this Amendment are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Amendment.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their authorized
representatives on the date first above written.
| FX REAL ESTATE AND ENTERTAINMENT INC. | |||||
| By: | /s/ Xxxxxxxx X. Xxxxxx | ||||
| Name: | Xxxxxxxx X. Xxxxxx | ||||
| Title: | Executive Vice President | ||||
| THE XXXX ALTERNATIVE FUND, L.P. | |
||||
| By: | WRH Partners II, LLC, its General Partner |
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| By: | /s/ Xxxxx Xxxxx | ||||
| Name: | Xxxxx Xxxxx | ||||
| Title: | Counsel | ||||
| THE XXXX ALTERNATIVE PARALLEL FUND, L.P. | |
||||
| By: | WRH Partners II, LLC, its General Partner |
||||
| By: | /s/ Xxxxx Xxxxx | ||||
| Name: | Xxxxx Xxxxx | ||||
| Title: | Counsel | ||||
