Exhibit 10.41
TERMINATION AGREEMENT
This Termination Agreement ("Termination Agreement") by and between
Entertainment Boulevard, Inc., a Nevada corporation (the "Company"), and Xxxx
Xxxx XxXxxxx Clearing Corporation ("RPMCC") becomes effective when at least
$5,000,000 is raised by Cruttenden Xxxx Incorporated ("CRI") under the
Follow-on Placement (as that term is defined below).
WITNESSETH:
WHEREAS, the Company and RPMCC are parties to a placement Agency
Agreement dated September 3, 1999 (the "Agreement").
WHEREAS, the Company proposes to engage CRI to act as a placement agent
in two offerings as follows: (i) an offering of 7.5 units of the Company's
securities (the "Bridge Placement"), each unit consisting of (x) a $100,000
secured promissory note and (y) warrants to purchase 40,000 shares of the
Company's common stock, par value $.001 per share, at an exercise price of
$1.00 per share and (ii) an offering of up to $7,000,000 in convertible
preferred securities pursuant to Regulation D in a private placement (the
"Follow-on Placement").
WHEREAS, in connection with the foregoing, the Company desires to
terminate the Agreement and all amendments thereto (except as specifically
set forth herein), provided that at least $5,000,000 is raised by CRI under
the Follow-on Placement. Following satisfaction of such condition, RPMCC
will agree to waive all its rights legally available under the Agreement and
allow the Company to accept funding from CRI.
WHEREAS, the Company and RPMCC desire to have CRI act in the
aforementioned offerings.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. RPMCC retains the right to complete the placement of securities
as per the Agreement and receive all compensation due under the Agreement.
2. RPMCC agrees to use its best efforts to cause its investors to
convert the $4 million of 8.0% Mandatorily Convertible Series A Preferred
Stock into shares of the Company's common stock at a floor price of $1.50 per
share concurrent with the closing of at least $5,000,000 under the Follow-on
Placement.
3. For a period of one year from the date hereof, RPMCC retains the
right to designate one person who shall have Board Observer status. Although
this person shall not be a Director of the Company, he shall have the right to
attend all meetings of the Board of Directors.
4. For a period of nine (9) months from the date hereof, RPMCC
retains the exclusive right (which it may decline) to issue an opinion when
requested by the Company regarding valuation or fairness of any offer in the
event of a merger or sale of the Company.
5. The Company agrees to include in its recently filed SB-2
registration statement all shares issuable upon conversion of the Series A
Convertible Preferred, all shares issued in connection with the loans to the
Company as listed in Paragraph 11 below, the Placement Agent Warrants issued
as compensation for various financings for the Company and any warrants
issued under this Termination Agreement and to use its best efforts to have
that registration statement declared effective.
6. Except for the securities being registered under the aforesaid
SB-2 registration statement, the Company agrees not to register for resale
any of its securities until 90 days after the effectiveness of the
above-mentioned registration statement.
7. The Company agrees not to affect a recapitalization (forward
split, reverse split, etc.) until the later of (i) 90 days after the
effectiveness of the aforesaid SB-2 registration statement or (ii) the
closing of the Follow-on Placement.
8. In consideration of RPMCC relinquishing its valuable rights
under the Agreement, and causing its investors to convert all of their
Preferred Stock under Paragraph 2 above and obtaining consents from such
investors in the form of Schedule B attached hereto, the Company agrees to
issue 500,000 warrants to the parties and in the amounts as disclosed in
Schedule A attached hereto to purchase shares of the Company's common stock,
250,000 of such warrants exercisable at $0.50 per share and 250,000 warrants
exercisable at $3.50 per share. The term and the form of warrants and
registration rights related thereto shall be the same as the warrants issued
to RPMCC under the Agreement.
9. RPMCC will waive any and all rights it has under Paragraph 7(e)
of that certain Registration Rights Agreement dated September 3, 1999 between
RPMCC and the Company if at least $5,000,000 is raised under the Follow-on
Placement on or before March 15, 2000. If the $5,000,000 is raised by CRI
subsequent to March 15, 2000, RPMCC will waive only thirty (30) days of the
late fees to which it is entitled under said Paragraph 7(e).
10. This Termination Agreement supersedes, restates and amends that
certain Termination Agreement dated December 30, 1999 between the parties
hereto; provided, however, the waiver of RPMCC's rights hereunder shall only
be effective if at least $5,000,000 is raised by CRI under the Follow-on
Placement.
11. The Company agrees to pay RPMCC, to the extent not heretofore
paid, its usual placement and attorney fees (as per the Agreement) out of its
proceeds from the CRI Follow-on Placement for services rendered in the
following transactions: (a) the $500,000 loan to the Company dated November
1999, (b) the $200,000 loan to the Company dated January 2000 and (c) this
Termination Agreement. In addition, the Company agrees to pay, out of the
proceeds of the Follow-on Placement, all costs and expenses incurred in
connection with the negotiation and execution of this Termination Agreement,
including reasonable fees and disbursements of counsel.
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XXXX XXXX XxXXXXX CLEARING CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
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Title: Managing Director
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ENTERTAINMENT BOULEVARD, INC.
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, Chairman & Chief Executive Officer
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SCHEDULE A
Xxxxxxx X. Xxxxx 30,000 (1/2 @ $0.50 and 1/2 @ $3.50)
Xxxx Xxxx XxXxxxx
Clearing Corporation 188,000 (1/2 @ $0.50 and 1/2 @ $3.50)
Xxxxxxx Xxxxxxxxx 101,000 (1/2 @ $0.50 and 1/2 @ $3.50)
Xxxxx Xxxxxxxxx 101,000 (1/2 @ $0.50 and 1/2 @ $3.50)
Xxxxxxx Xxxxxxxxx 50,000 (1/2 @ $0.50 and 1/2 @ $3.50)
Xxxxxx Xxxxxxxx 30,000 (1/2 @ $0.50 and 1/2 @ $3.50)
