FOREBEARANCE AND SETTLEMENT AGREEMENT
FOREBEARANCE
AND SETTLEMENT AGREEMENT
This
Agreement (this “Agreement”)
is
dated as of ____________, 2006 and is entered into by and among RoomLinX, Inc.,
a Nevada corporation (the “Company”),
and
the Investors set forth on the signature pages hereto (the “Investors”).
R
E C I T A L S:
WHEREAS,
pursuant to the terms of a Securities Purchase Agreement dated March 2, 2005
among the Company and the Investors named therein (the “Purchase
Agreement”),
the
Investors made loans to the Company as evidenced by convertible debentures
dated
March 2, 2005 in the original aggregate principal amount of $1,100,000.00 (the
“Notes”)
and
the Company issued to the Investors warrants to purchase shares of Common Stock
in the Company (the “Warrants”)
at an
exercise price of $.075 per share, as set forth on Schedule
A
hereto;
and
WHEREAS,
pursuant to the terms of the Purchase Agreement, the Company and the Investors
entered into a Registration Rights Agreement dated as of March 2, 2005 (the
“Registration
Agreement”)
pursuant to which the Investors were granted certain registration rights in
respect of the shares of Common Stock underlying the Notes and Warrants and
providing for liquidated damages (“Liquidated
Damages”)
in the
event that the Company failed to perform its obligations under the Registration
Agreement; and
WHEREAS,
certain
Events of Default have occured under the Notes and the Registration Agreement;
and
WHEREAS,
solely
upon the terms and subject to the conditions of this Agreement, the Investors
have agreed for an initial ninety (90) day period, and upon compliance by the
Company with the terms of this Agreement, for an additional one hundred eighty
(180) day period, to forebear from exercising any and all of their rights and
remedies under the Notes including demanding repayment of the Notes and payment
of Liquidated Damages and to permanently settle the obligations of the Company
to the Investors upon the terms and conditions set forth herein;
and
WHEREAS,
all
capitalized terms used but not defined herein shall have the meanings given
to
such terms in the Purchase Agreement.
NOW
THEREFORE,
it is
hereby agreed between the parties as follows:
1. Acknowledgment
of Debt and Default.
The
Company acknowledges and agrees that:
(a) The
Company is liable for the full and timely payment of the Notes, including,
without limitation, all principal, accrued interest, attorneys’ fees and other
costs, charges, obligations and expenses heretofore, now or from time to time
hereafter incurred by the Investor in connection with the Notes, the Events
of
Default and the negotiation, preparation, administration and enforcement of
this
Agreement; and
(b) Each
Investor has the right to immediately initiate and prosecute any or all of
its
rights or remedies, whether pursuant to the Note, at law, in equity or
otherwise.
(c) In
addition, the Company has failed to register the shares of Common Stock
underlying the Notes and Warrants owned by the Investors and to pay Liquidated
Damages to the Investors with respect to such failure pursuant to the terms
and
conditions of the Registration Agreement.
(d) Each
Investor has the right to immediately initiate and prosecute any or all of
its
rights or remedies, whether pursuant to the Registration Agreement, at law,
in
equity or otherwise.
2. Forebearance. Provided
that no other breach, default or event of default exists or occurs under the
Notes, other than the “Disclosed Defaults” (hereinafter defined), each Investor
hereby agrees to forebear from the exercise of any and all rights and remedies
under the Notes and/or the Registration Agreement and applicable law (including
demanding repayment of the Notes) for a period of ninety (90) days from the
date
of this Agreement (the “Initial
Forebearance Period”).
Subject to Section 7 hereof, each Investor further agrees that during the
Initial Forebearance Period, the Note shall not accrue any additional interest
and that the amount set forth on Schedule
A
under
the heading “Amount of Notes Outstanding as of _________, 2006” represents the
amount to be repaid by the Company in accordance with this Agreement in the
absence of any Default under Section 7 hereto. “Disclosed Defaults” means the
Company’s failure to pay any amounts under the Notes when due and to register
the shares of Common Stock underlying the Notes and Warrants under the
Registration Agreement.
3. Next
Financing.
During
the Initial Forebearance Period, the Company agrees to use its reasonable best
efforts to raise a minimum of $1,000,000.00 through the sale of equity or equity
linked securities (such as convertible debt) in the Company, the closing (the
“Closing”)
of
which is expected to occur within 90 days of the date hereof (the “Next
Financing”).
The
Company agrees that the exercise price of any warrants to be issued in
connection with the Next Financing shall be not less than $0.06 per share of
Common Stock.
4. Cash
Payments to Investors.
Upon
the
Closing, the Company shall pay to each Investor such Investor’s proportionate
share of $466,666.66 pro rata to each Investor in proportion to the principal
amount of such Investor’s investment to the aggregate original principal amount
of the Notes by wire transfer of immediately available funds to such accounts
as
may be designated by the Investors.
5. Issuance
of Securities to Investors. At
the
Closing, the Company shall issue to the Investors the same principal securities
(debt or equity) of the Company issued by the Company to investors in the Next
Financing, in the aggregate amount of $550,000.00 (assuming all Investors
execute this Agreement and pro-rata to each Investor based on such Investor’s
overall ownership percentage of all Notes) (based on the purchase price paid
for
such securities by the Investors in the Next Financing). Such securities shall
be divided among the holders of Notes in proportion to the principal amount
of
the Notes held by them and surrendered for cancellation.
6. Second
Forebearance Period.
Assuming
that the Next Financing is consummated on or prior to the expiration of the
Initial Forebearance Period and the Company complies with Sections 4 and 5
above, the Investors shall continue to forebear from exercising any rights
or
remedies for an additional one-hundred eighty (180) day period (the
“Second
Forebearance Period”).
On or
prior to the end of the Second Forebearance Period, the Company shall pay to
each Investor such Investor’s proportionate share of $233,333.34, by wire
transfer of immediately available funds to such account as may be designated
by
the Investors in full satisfaction of the Notes.
7. Default.
The
Company hereby acknowledges and agrees that if it fails to fully and timely
satisfy, perform and comply with each and every term and provision of Sections
3, 4, 5 and 6 above (herinafter a “Default”), then (a) the Initial Forebearance
Period or the Second Forebearance Period, as the case may be, shall immediately
terminate, and (b) each Investor may immediately exercise such of its rights
and
remedies as it deems appropriate, whether pursuant to the Notes, the Purchase
Agreement, at law, in equity or otherwise. In addition and notwithstanding
anything contained herein to the contrary, in the event of a Default, all
interest under the Notes which would have otherwise accrued but for the
Forebearance provisions of Section 1 hereto, shall be reinstated from the day
of
this Agreement and shall continue to accrue until the Notes are repaid and
the
Company shall be indebted to the Investors for an additional $225,000 to be
apportioned pro-rata to each Investor based on such Investor’s overall ownership
percentage of all Notes to be memorialized in new promissory notes on comparable
terms (i..e., interest rate and term) to the Notes which will be promptly
delivered to each Investor following such Default. In the event of Default
the
Investors agree to provide RoomLinX written notice of the default and allow
RoomLinX ten (10) business days from receipt of the written notice to cure
the
default.
8. Reaffirmation.
The
Company hereby reaffirms and remakes all of its representations, warranties
and
covenants made in the Notes and Purchase Agreement. If, and to the extent,
the
terms and provisions of this Agreement conflict or contradict with the terms
and
provisions of the Notes or the Purchase Agreement, then the terms and provisions
of this Agreement shall govern and control; provided, however, to the extent
the
terms and provisions of this Agreement do not contradict or conflict with the
terms and provisions of the Notes or Purchase Agreement, then the Notes or
Purchase Agreement, as amended by this Agreement, shall remain in and have
their
intended full force and effect, and the Company and the Investors hereby affirm,
confirm and ratify the same.
9. Forebearance
Agreement Not Refinancing.
Each
Investor’s agreement to forbear pursuant to this Agreement is not, and shall not
be construed as, a refinancing of the Notes.
10. Authority
to Execute this Agreement.
The
Company represents and warrants that it has the right, power and capacity and
is
duly authorized and empowered to enter into, execute, deliver and perform this
Agreement. The execution, delivery and performance by the Company of this
Agreement shall not, by the lapse of time, the giving of notice or otherwise,
constitute a violation of any applicable law or breach of any provision
contained in the Company's Certificate of Incorporation or By-Laws, or contained
in any agreement, instrument or document to which the Company is now or
hereafter a party or by which it is or may become bound.
11. Forebearance
Limitation.
The
Forebearance described in this Agreement shall be limited solely to the
Disclosed Defaults and shall not be deemed (a) a Forebearance of any other
terms
or provisions, or a waiver of any terms or provisions, of the Notes, the
Purchase Agreement or any other agreements, documents or instruments referenced
therein or executed and delivered pursuant thereto, (b) a Forebearance or waiver
by Investor of any Event of Default, whether now existing or hereafter arising,
other than the Disclosed Defaults, or (c) to affect any of Investor’s rights or
remedies, whether at law, in equity or otherwise and whether pursuant to the
Notes, the Purchase Agreement, or any other agreements, documents or instruments
referenced therein or executed and delivered pursuant thereto, except as
expressly provided herein.
12. Reservation
of Rights.
Each
Investor continues to reserve all of its rights and remedies, pursuant to this
Agreement, the Notes and the Purchase Agreement, as well as any rights and
remedies at law, in equity or otherwise. Nothing contained in this Agreement
shall be or be deemed a waiver of any presently existing or any hereafter
arising or occurring breach, default or event of default, including, but not
limited to, the Disclosed Defaults, nor shall preclude the subsequent exercise
of any of Investor’s rights or remedies. Upon a default under this Agreement or
a breach, default or event of default under the Notes or the Purchase Agreement
other than the Disclosed Defaults, the Initial Forebearance Period or the Second
Forebearance Period, as the case may be, shall immediately terminate and the
Investor may exercise all of its rights and remedies, whether pursuant to this
Agreement, the Notes, the Purchase Agreement, at law, in equity or
otherwise.
13. Waiver
and Release.
In
consideration of each Investor’s execution and delivery of this Agreement the
Company hereby waives, releases and forever discharges such Investor, its
predecessors, parents, subsidiaries, affiliates, agents, employees, officers,
directors, shareholders, attorneys, legal representatives, successors and
assigns, and each of them, from any and all claims, demands, counterclaims,
set-offs, defenses, debts, liabilities, obligations, costs, expenses, actions,
causes of action and damages of every kind, nature and description whatsoever,
known or unknown, foreseeable and unforeseeable, liquidated and unliquidated,
and insured and uninsured, which the Company heretofore, now and from time
to
time hereafter owns, holds or has by reason of any matter, cause or thing
whatsoever, arising from, relating to or in connection with the Notes, the
Purchase Agreement, or this Agreement.
14.
Waivers.
Each
Investor hereby agrees as follows, as of the date when the Company fully and
timely complies with the terms and provisions of each of Sections 3, 4, 5,
and 6
hereto:
(a) to
permanently waive any and all Liquidated Damages under the Registration
Agreement;
(b) to
permanently waive any anti-dilution rights under the Notes and the Warrants,
any
and all additional interest, fees or penalties due under the Notes and any
and
all Events of Default under the Notes as defined in Section 10 of the Notes;
and
(c) to
permanently waive the provisions of Sections 4.7 and 4.9 of the Purchase
Agreement with respect to the Next Financing.
15. Reduction
of Exercise Price of Warrants and Termination of Registration
Agreement.
(a) As
of the
date hereof, the “Exercise Price” of each of the Warrants shall be reduced from
$0.075 to the lower of (i) $0.06 per share of Common Stock or (ii) the exercise
price of the warrants issued in the Next Financing.; and
(b) As
of the
Closing, the Registration Agreement shall be terminated and of no further force
and effect. The Company agrees to include the shares of Common Stock underlying
the Warrants in any registration agreement entered into by the Company with
the
investors in the Next Financing on the same terms as such investors receive
in
respect of the securities purchased by them.
16. Miscellaneous.
(a)
This
Agreement shall be governed by, and shall be construed in accordance with,
the
laws of the State of New York, without regard to conflicts of law
principals.
(b) In
the
event that a party brings an action or proceeding relating to this Agreement,
or
the enforcement of any of the articles of this Agreement, then such action
or
proceeding shall be brought in the Courts located in the County of New York,
State of New York. In any action, lawsuit or proceeding brought to enforce
or
interpret the provisions of this Agreement and/or arising out of or relating
to
any dispute between or among the parties, the prevailing party shall be entitled
to recover all of its reasonable attorney’s fees, costs and expenses, in
addition to any other relief to which such party may be entitled.
(c) In
the
event that any provision or portion of this Agreement shall, for any reason,
be
held invalid, unenforceable or contrary to law, the remainder of such provision
and the remaining provisions of this Agreement shall not be affected but,
rather, shall remain in full force and effect; provided, however, that remainder
of this Agreement shall continue to substantially reflect the intent of the
parties as indicated herein. The parties hereto agree in such event to execute,
acknowledge and deliver all such further documents and to take all such further
action as may be necessary or desirable to carry out and make effective the
terms, conditions, purposes and intent of this Agreement.
(d)
No
agreement or understanding which modifies or alters this Agreement or any part
thereof shall be binding upon any party hereto unless it is in writing and
duly
signed by all of the parties hereto.
(e) This
Agreement may be executed in counterparts each of which shall be deemed to
be an
original, but all of which shall constitute one and the same agreement. Any
party shall be entitled to rely on a facsimile signature as if it were an
original.
(f) No
failure to exercise, and no delay in exercising, any of Investor’s rights,
powers or privileges shall operate as a waiver thereof. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision. No extension of time
for the payment of any of the indebtedness or any other sum owed by the Company
to Investors, or the performance of any other obligation or act, shall be deemed
to be an extension of the time for payment or performance of any obligation
or
act.
COUNTERPART
SIGNATURE PAGE
TO
FOREBEARANCE AND SETTLEMENT AGREEMENT
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
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ROOMLINX,
INC.
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By:
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Name:
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Title:
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COUNTERPART
SIGNATURE PAGE
TO
FOREBEARANCE AND SETTLEMENT AGREEMENT
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
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Note
Holder
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