AGREEMENT TO CONVERT DEBT
Exhibit
10.5
This Agreement to Convert Debt (the
“Agreement”) is made on this 23rd day of
June 2008 by and between ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the “Lender”) and National
Lampoon, Inc. (the “Company”).
RECITALS
A. As
of June 23, 2008, the Company owes the Lender $92,553.88 in loans, representing
$83,333.33 in principal amount and $9,220.55 in accrued interest (the
“Loans”).
B. At
the request of the Company, the Lender has agreed to accept payment of the Loans
in accordance with the terms of this Agreement.
Now, therefore, the parties agree as
follows:
AGREEMENT
1. Issuance of Securities to
Lender. The Lender shall be entitled to choose one of the
following methods of payment as full satisfaction of the Loans:
(i) the Company will credit the amount
of the Loans toward the exercise of some or all of the warrants the
Lender received in connection with his purchase of the Company’s
Series B Convertible Preferred Stock and Series C Convertible Preferred Stock;
or
(ii) the Company will pay the Loans
with shares of the Company’s common stock; or
(iii) the Lender may, by written
instruction to the Company, choose a combination of (i) and (ii).
The per
share value of the common stock used to compute the number of shares to be
issued in the event that the Lender chooses to accept shares of the Company’s
common stock as full or partial payment of the Loans will be the last sale price
of the common stock on the trading day preceding the date of the Lender’s
instruction to the Company.
2. Exercise of Right to Choose Payment
Option. The Company agrees that the Lender may exercise his
rights from time-to-time under this Agreement until the Loans have been paid in
full in accordance with paragraph 1 above, provided, however, that the
Lender must exercise all of his rights under this Agreement no later than July
31, 2008.
3. Relinquishment of Right to Receive
Cash. By executing this Agreement, the Lender agrees that he
shall have no further right to demand payment of the Loans with
cash. If the Lender fails or refuses to exercise his rights under
this Agreement by the close of business on July 31, 2008, then the Company will
pay the Loans (or the balance of the Loans remaining unpaid) by issuing shares
of its common stock in accordance with paragraph 1(ii) above.
4. Miscellaneous.
(a) Cooperation. Subsequent
to the payments contemplated herein, the Lender and the Company agree, without
further consideration, to cooperate and diligently perform any further acts,
deeds and things, and to execute and deliver any documents that may be
reasonably necessary or otherwise reasonably required to consummate, evidence,
confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense.
(b) Entire Agreement/No Collateral
Representations. The Lender and the Company expressly
acknowledge and agree that this Agreement: (1) is the final, complete
and exclusive statement of the agreement of each of them with respect to the
subject matter hereof; (2) supersedes any prior or contemporaneous agreements,
communications, discussions, promises, representations, understandings, conduct,
acts, courses of dealing, warranties, interpretations or terms of any kind,
whether oral or written (collectively and severally, the “prior agreements”), and that
any such prior agreements are of no force or effect except as expressly set
forth herein; and (3) may not be varied, supplemented or contradicted by
evidence of prior agreements, or by evidence of subsequent oral
agreements.
(c) Amendment; Waiver;
Forbearance. Except as expressly provided otherwise herein,
neither this Agreement nor any of the terms, provisions, obligations or rights
contained herein, may be amended, modified, supplemented, augmented, rescinded,
discharged or terminated (other than by performance), except by a written
instrument or instruments signed by all of the parties to this
Agreement. Except to the extent that the party or parties claimed to
have given or consented to a waiver may have otherwise agreed in writing, no
such waiver shall be deemed a waiver or relinquishment of any other term,
provision, agreement, act, obligation or right granted under this
Agreement.
(d) Severability. If
any term or provision of this Agreement or the application thereof to any person
or circumstance shall, to any extent, be determined to be invalid, illegal or
unenforceable under present or future laws, then, and in that
event: (1) the performance of the offending term or provision (but
only to the extent its application is invalid, illegal or unenforceable) shall
be excused as if it had never been incorporated into this Agreement, and, in
lieu of such excused provision, there shall be added a provision as similar in
terms and amount to such excused provision as may be possible and be legal,
valid and enforceable; and (2) the remaining part of this Agreement (including
the application of the offending term or provision to persons or circumstances
other than those as to which it is held invalid, illegal or unenforceable) shall
not be affected thereby, and shall continue in full force and effect to the
fullest extent provided by law.
(e) Parties in
Interest. Notwithstanding anything else to the contrary
herein, nothing in this Agreement shall confer any rights or remedies under or
by reason of this Agreement on any persons other than the parties hereto and
their respective successors and assigns, if any.
(f) Enforcement. This
Agreement shall be construed and enforced in accordance with the laws of the
State of California.
(g) Counterparts. 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
instrument, binding on all parties hereto. Any signature page of this
Agreement may be detached from any counterpart of this Agreement and reattached
to any other counterpart of this Agreement identical in form hereto by having
attached to it one or more additional signature pages.
WHEREFORE, the Lender and the
Company have executed this Agreement in the City of Los Angeles, County of Los
Angeles, State of California, on the Effective Date.
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“Lender”
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| ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
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“Company”
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National
Lampoon, Inc.
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By: /s/
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Chief Executive
Officer
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