MAY 2008 AMENDMENT AGREEMENT
MAY
2008 AMENDMENT AGREEMENT
THIS
MAY
2008 AMENDMENT AGREEMENT (this “Agreement”)
is
made as of May 30, 2008, among Customer Acquisition Network Holdings, Inc.,
a
Delaware corporation (the “Company”),
the
Subsidiaries (as defined in the Buyer Note (as defined below)), and Longview
Marquis Master Fund, L.P., a British Virgin Islands limited partnership
(“Buyer”).
WITNESSETH:
WHEREAS,
the Company, Buyer and Alpha Capital Anstalt, a ▇▇▇▇▇▇▇▇▇▇▇▇ corporation
(“Alpha”
and,
together with Buyer, the “Original
Buyers”),
entered into that certain Securities Purchase Agreement, dated as of November
15, 2007 (as amended, restated, supplemented or otherwise modified and in effect
from time to time, the “Purchase
Agreement”),
pursuant to which the Company issued to the Original Buyers senior secured
notes
in an aggregate original principal amount of $5,000,000 (such notes, together
with any promissory notes or other securities issued in exchange or substitution
therefor or replacement thereof, and as any of the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
each a “Note”
and,
collectively, the “Notes”);
WHEREAS,
on the date hereof, Note No. VAM-001 issued to Buyer in the principal amount
of
$4,388,889.00 remains outstanding (the “Buyer
Note”);
and
WHEREAS,
the Company and Buyer desire to amend the terms of the Buyer Note as provided
herein.
NOW,
THEREFORE, in consideration of the agreements, provisions and covenants
contained herein and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, each of the undersigned agrees
as
follows:
1. Amendment
of the Buyer Note.
a. Buyer
hereby agrees with the Company that, subject to, and effective upon, the receipt
by Buyer of cash in the amount of $50,000 (the “Cash
Amount”),
by
wire transfer of immediately available funds in accordance with the instructions
set forth on Exhibit A
hereto,
from the Company by no later than 5:00 p.m. New York time, on June 2, 2008
(such
time and date, the “Payment
Deadline”),
the
definition of “Maturity
Date”
set
forth in the Appendix to the Buyer Note shall be amended to read in its entirety
as follows:
“Maturity
Date”
means
June 13, 2008.”
b. In
the
event that Buyer does not receive the Cash Amount by the Payment Deadline,
this
Agreement shall be null and void and of no further force and effect, and the
Buyer Note shall not be amended in the manner set forth in this Section 1
(i.e., the definition of “Maturity
Date”
in
the
Buyer Note shall remain as originally set forth therein).
2. Representations
and Warranties of the Company.
The
Company represents and warrants to Buyer that:
a. Authorization;
Enforcement; Validity.
Each of
the Company and the Subsidiaries has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and the Buyer
Note (as amended hereby). The execution and delivery of this Agreement by the
Company and the Subsidiaries and the consummation of the transactions
contemplated hereby and thereby and by the Buyer Note (as amended hereby) have
been duly authorized by the respective boards of directors of the Company and
the Subsidiaries, and no further consent or authorization is required by the
Company, the Subsidiaries or their respective boards of directors or
shareholders. This Agreement has been duly executed and delivered by the Company
and each of the Subsidiaries, and each of this Agreement and the Buyer Note
(as
amended hereby) constitutes a valid and binding obligation of each of the
Company and the Subsidiaries (as applicable), enforceable against each of the
Company and the Subsidiaries (as applicable) in accordance with its terms,
except as such enforceability may be limited by general principles of equity
or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
b. Issuance
of Securities.
The
amendment of the Buyer Note is exempt from registration under the Securities
Act
of 1933, as amended, and applicable state securities laws, based upon the
representation made by Buyer herein that Buyer is an “accredited
investor.”
c. No
Conflicts.
The
execution and delivery of this Agreement by each of the Company and the
Subsidiaries, the performance by each of the Company and the Subsidiaries (as
applicable) of their respective obligations hereunder and under the Buyer Note
(as amended hereby) and the consummation by each of the Company and the
Subsidiaries (as applicable) of the transactions contemplated hereby and by
the
Buyer Note (as amended hereby) will not (i) result in a violation of the
certificate of incorporation or the bylaws of the Company or the organizational
documents of any Subsidiary; (ii) conflict with, or constitute a breach or
default (or an event which, with the giving of notice or lapse of time or both,
constitutes or would constitute a breach or default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or other
remedy with respect to, any agreement, indenture or instrument to which the
Company or any of the Subsidiaries is a party; or (iii) result in a violation
of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations) applicable to the Company or any of
the
Subsidiaries or by which any property or asset of the Company or any of the
Subsidiaries is bound or affected. Neither the Company nor any of the
Subsidiaries is required to obtain any consent, authorization or order of or,
except as required by Section 5 below, make any filing or registration with,
any
court or governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under, or
contemplated by, this Agreement or the Buyer Note (as amended
hereby).
d. Outstanding
Notes.
As of
the date hereof, the Buyer Note is the only Note outstanding.
3. Representation
and Warranties of Buyer.
Buyer
represents and warrants to the Company that (a) Buyer is a validly existing
limited partnership and has the requisite limited partnership power and
authority to enter into and perform its obligations under this Agreement, (b)
this Agreement has been duly and validly authorized, executed and delivered
on
behalf of Buyer and is a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms, and (c) Buyer is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D (as defined in
the Purchase Agreement).
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4. Acknowledgment
of the Company and the Subsidiaries.
The
Company and each of the Subsidiaries hereby irrevocably and unconditionally
acknowledge, affirm and covenant to Buyer that:
a. Buyer
is
not in default under any of the Transaction Documents and has not otherwise
breached any obligations to the Company or any of the Subsidiaries;
and
b. there
are
no offsets, counterclaims or defenses to the Liabilities (as defined in the
Security Agreement (as defined in the Purchase Agreement)) or Obligations (as
defined in the Guaranty (as defined in the Purchase Agreement)), including
the
liabilities and obligations of the Company under the Buyer Note (as amended
hereby), or to the rights, remedies or powers of Buyer in respect of any of
the
Liabilities or Obligations or any of the Transaction Documents, and the Company
and each of the Subsidiaries agree not to interpose (and each does hereby waive
and release) any such defense, set-off or counterclaim in any action brought
by
Buyer with respect thereto.
5. Covenants. Prior
to
5:30 p.m., New York time, on the first Business Day (as defined in the Buyer
Note) following the date hereof, the Company shall file a current report on
Form
8-K (the “Amendment
Form 8-K”)
with
the Securities and Exchange Commission (the “SEC”), describing
the terms of this Agreement and including this Agreement as an exhibit thereto,
in the form required by the Securities Exchange Act of 1934, as amended. From
and after the filing of this Amendment Form 8-K with the SEC, Buyer shall not
be
in possession of any material nonpublic information received from the Company
or
any of its affiliates, officers, directors, employees or agents as a result
of
this Agreement or any of the matters referred to herein.
6. Avoidance
of Doubt.
The
parties hereto hereby agree, for the avoidance of doubt, that (a) the term
“Notes”
as
used
in the Transaction Documents shall mean the Buyer Note, as, and to the extent,
amended by this Agreement, and (b) the term “Liabilities”
and
“Obligations”
as
used
in the Transaction Documents shall include all liabilities and obligations
of
the Company under this Agreement, under the Buyer Note (as amended hereby)
and
under the other Transaction Documents, and each of the parties hereto agrees
not
to take any contrary positions.
7. Reservation
of Rights.
Buyer
has not hereby waived (a) any breach, default or Event of Default that may
be
continuing under any of the Transaction Documents or (b) any of Buyer’s rights
or remedies arising from any such breach, default or Event of Default or
otherwise available under the Transaction Documents or at law. Buyer expressly
reserves all such rights and remedies.
8. Successors
and Assigns.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The successors
and
assigns of such entities shall include their respective receivers, trustees
or
debtors-in-possession.
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9. Further
Assurances.
The
Company hereby agrees from time to time, as and when requested by Buyer, to
execute and deliver or cause to be executed and delivered, all such documents,
instruments and agreements, including secretary’s certificates, stock powers and
irrevocable transfer agent instructions, and to take or cause to be taken such
further or other action, as Buyer may reasonably deem necessary or desirable
in
order to carry out the intent and purposes of this Agreement, the Buyer Note
(as
amended hereby) and the other Transaction Documents.
10. Rules
of Construction.
All
words in the singular or plural include the singular and plural and pronouns
stated in either the masculine, the feminine or neuter gender shall include
the
masculine, feminine and neuter, and the use of the word “including” in this
Agreement shall be by way of example rather than limitation.
11. Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
12. Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party.
In
the
event that any signature to this Agreement or any amendment hereto is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof. No party hereto shall raise the use of a facsimile machine or e-mail
delivery of a “.pdf” format data file to deliver a signature to this Agreement
or any amendment hereto or the fact that such signature was transmitted or
communicated through the use of a facsimile machine or e-mail delivery of a
“.pdf” format data file as a defense to the formation or enforceability of a
contract, and each party hereto forever waives any such defense.
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13. Section
Headings.
The
section headings herein are for convenience of reference only, and shall not
affect in any way the interpretation of any of the provisions
hereof.
14. No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rule of strict construction
will
be applied against any party.
15. Merger.
This
Agreement, the Buyer Note (as amended hereby) and the other Transaction
Documents represent the final agreement of each of the parties hereto with
respect to the matters contained herein and may not be contradicted by evidence
of prior or contemporaneous agreements, or prior or subsequent oral agreements,
among any of the parties hereto. Except as expressly set forth in this
Agreement, in the Buyer Note (as amended hereby) and the other Transaction
Documents, neither the Company nor Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters.
16. Interpretative
Matters.
Unless
the context otherwise requires, (i) all references to Sections, Schedules,
Appendices or Exhibits are to Sections, Schedules, Appendices or Exhibits
contained in or attached to this Agreement, (b) words in the singular or plural
include the singular and plural and pronouns stated in either the masculine,
the
feminine or neuter gender shall include the masculine, feminine and neuter,
(c)
the words “hereof,” “herein” and words of similar effect shall reference this
Agreement in its entirety, and (d) the use of the word “including” in this
Agreement shall be by way of example rather than limitation.
17. Reaffirmation.
Each of
the Company and the Subsidiaries as issuer, debtor, grantor, pledgor, mortgagor,
guarantor or assignor, or in other any other similar capacity in which such
Person grants liens or security interests in its property or otherwise acts
as
accommodation party or guarantor, as the case may be, hereby (i) acknowledges
and agrees that it has reviewed this Agreement, (ii) ratifies and reaffirms
all
of its obligations, contingent or otherwise, under each of the Transaction
Documents, including the Buyer Note (as amended hereby) to which it is a party
(after giving effect hereto) and (iii) to the extent such Person granted liens
on or security interests in any of its property pursuant to any such Transaction
Document as security for or otherwise guaranteed the Liabilities under or with
respect to the Transaction Documents, ratifies and reaffirms such guarantee
and
grant of security interests and liens and confirms and agrees that such security
interests and liens hereafter secure all of the Liabilities as amended hereby.
Each of the Company and the Subsidiaries hereby consents to this Agreement
and
acknowledges that each of the Transaction Documents, including the Buyer Note
(as amended hereby), remains in full force and effect and is hereby ratified
and
reaffirmed.
[Remainder
of page intentionally left blank; Signature page follows]
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IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by each
of
the undersigned as of the date first above written.
| COMPANY: | ||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | CEO | |
| SUBSIDIARIES: | ||
|
CUSTOMER
ACQUISITION NETWORK, INC.
|
||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | CEO | |
|
DESKTOP
ACQUISITION SUB, INC.
|
||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | CEO | |
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| BUYER: | ||
|
LONGVIEW
MARQUIS MASTER FUND, L.P.
|
||
| By: | Viking Asset Management, LLC | |
| Its: | Investment Advisor | |
| By: | /s/ S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Name: | S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Title: | Chief Financial Officer | |
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