Amendment No. 4 to Letter Agreement
Amendment
No. 4 to Letter Agreement
THIS AMENDMENT is made as of
April 30, 2009, by and between ▇▇▇▇▇▇ Capital Master Fund, Ltd. (“▇▇▇▇▇▇”) and
Lateral Media, Inc. (the “Company”).
WHEREAS, the Company entered
into that certain letter agreement with ▇▇▇▇▇▇, dated as of July 11, 2007 (the
“Loan Agreement”), in connection with a loan from ▇▇▇▇▇▇ to the Company of up to
a principal amount of $100,000 (the “Loan”); and
WHEREAS, the Company amended
the Loan Agreement on November 15, 2007 to (i) increase the principal amount of
the Loan to up to $250,000 and (ii) provide that the entire outstanding
principal amount of the Loan and any accrued interest thereon, which shall be
due and payable by the Company upon, and not prior to, a Next Financing (as
defined in the Loan Agreement), to an amount of not less than $500,000;
and
WHEREAS, the Company further
amended the Loan Agreement on April 18, 2008 to (i) increase the principal
amount of the Loan to up to $500,000 and (ii) increase the entire outstanding
principal amount of the Loan and any accrued interest thereon, which shall be
due and payable by the Company upon, and not prior to, a Next Financing, to an
amount of not less than $750,000; and
WHEREAS, the Company further
amended the Loan Agreement on August 1, 2008 to (i) increase the principal
amount of the Loan to up to $750,000; (ii) increase the entire outstanding
principal amount of the Loan and any accrued interest thereon, which shall be
due and payable by the Company upon, and not prior to, a Next Financing, to an
amount of not less than $1,000,000 and (iii) provide that ▇▇▇▇▇▇ may, at is
option, receive any payment of principal and interest due on the Loan in the
form of the Company’s common stock or other securities that may be issued by the
Company in the event the Company consummates a financing in connection with a
change of control or similar transaction involving the Company, calculated based
on the value of the shares of the Company’s common stock or other securities
sold or issued by the Company in such financing transaction; and
WHEREAS, reference is made to
that certain letter agreement, dated as of December 18, 2008, entered into by
and between the Company and ▇▇▇▇▇▇, pursuant to which the aggregate amount of
the principal plus accrued and unpaid interest outstanding under the Loan was
converted into 1,063,836 shares of the Company’s common stock, and pursuant to
which the parties agreed that notwithstanding such conversion, ▇▇▇▇▇▇ may
continue to make loans to the Company at any time and from time to time in
accordance with the Loan Agreement, as amended; and
WHEREAS, each of the Company
and ▇▇▇▇▇▇ has agreed to increase the principal amount of the Loan and to amend
certain provisions of the Loan Agreement.
NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby amend the Loan Agreement as
follows:
1. Amendments. The Loan
Agreement is hereby amended to (i) increase the principal amount of the Loan to
up to $1,000,000 and (ii) provide that the entire outstanding principal amount
of the Loan and any accrued interest thereon shall be due and payable by the
Company upon, and not prior to, the consummation of a sale of securities (other
than a sale of shares of the Company’s common stock to officers, directors or
employees of, or consultants to, the Company in connection with their services
to the Company), to a third party or parties with proceeds to the Company of not
less than $1,250,000.
2. This
Amendment constitutes the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements, representations or understandings between the parties
relating to the subject matter hereof. The statements and agreements
in this Amendment shall be binding on the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
their respective successors and assigns. This Amendment may be
executed in any number of counterparts, and by different parties hereto on
separate counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[Signature
page follows]
Acknowledged
and agreed to:
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title:
Chief Executive Officer
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▇▇▇▇▇▇
CAPITAL MASTER FUND, LTD.
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By:
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/s/
▇▇▇ ▇▇▇▇
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Name:
▇▇▇ ▇▇▇▇
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Title:
Managing Director
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