▇▇▇▇.▇▇▇, INC.
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
January 5, 2010
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Manager
▇▇▇▇▇▇▇ FAMILY INVESTMENTS, LLC
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Option to Purchase Shares of ▇▇▇▇.▇▇▇, Inc.
Gentlemen:
Reference is made to the option agreement, dated August 28,
2009 among ▇▇▇▇.▇▇▇, IP Global Investors Ltd ("IPG") and Equities
Media Acquisition Corp. Inc. ("EMAC"), pursuant to which IPG and
EMAC or any of their individual or collective designees
(the "Optionholder") have the irrevocable right and option (the
"Purchase Option") to purchase, at any time or from time to time,
commencing on the Closing Date and ending on or before December
31, 2009 (the "Option Period") for one or more cash payment(s)
aggregating up to $5,000,000, that number of shares of Class A
Common Stock of ▇▇▇▇.▇▇▇ (the "Option Shares") as shall be
determined by dividing (a) the aggregate amount paid in cash
by any one or more Optionholder to ▇▇▇▇.▇▇▇ on each occasion
during the Option Period that the Purchase Option is exercised
by such Optionholder, by (b) twenty-one cents ($0.21) per
share (the "Option Price"). A true copy of the Option
Agreement is attached hereto as Exhibit. By its execution of
this letter, IPG confirms that EMAC has previously assigned
the Option solely to IPG and that IPG has assigned the Option
to Recovery Capital, Inc. ("Recovery Capital") or its
designees. Accordingly, for all purposes of this Agreement,
Recovery Capital is the present Optionholder. By its execution
of this letter, FNDM hereby agrees to extend the Option Period
to January 31, 2010.
▇▇▇▇.▇▇▇ now seeks additional funds to enable it to expand
its exchange traded fund business through its AdvisorShares, LLC
subsidiary, and to consummate one or more strategic investments.
Because of this, and because Recovery Capital is unable to
exercise the Purchase Option during the Option Period, Recovery
Capital hereby agrees to assign to ▇▇▇▇▇▇▇ Family Investments,
LLC or its designees (the "▇▇▇▇▇▇▇ Group") the entire Purchase
Option, and the ▇▇▇▇▇▇▇ Group is interested in exercising the
Purchase Option and purchase, for up to $5,000,000, shares of
the publicly traded Common Stock of ▇▇▇▇.▇▇▇ free and clear of
any liens and encumbrances.
1. Assignment of Purchase Option. Recovery Capital does
hereby agree to assign to the ▇▇▇▇▇▇▇ Group all of its rights
under the Purchase Option for a period that shall expire at
5:00 p.m. (Eastern Standard Time) on January 31, 2010 (the
"▇▇▇▇▇▇▇ Option Period"). In the event and to the extent that
the ▇▇▇▇▇▇▇ Group does not timely exercise the Purchase Option
(in the manner provided herein) by the expiration of the
untley Option Period, the foregoing assignment of the Purchase
Option shall expire and be of no further force or effect and no
member of the ▇▇▇▇▇▇▇ Group shall thereafter be deemed to be an
Optionholder under this Agreement. Upon the ▇▇▇▇▇▇▇ Group's
execution of this Purchase Option, ▇▇▇▇.▇▇▇ shall cause one or
more stock certificates evidencing up to the 23,809,524 Option
Shares to be issued to the ▇▇▇▇▇▇▇ Group by not later than
February 15, 2010.
2. Call Option. In the event and to the extent that the
▇▇▇▇▇▇▇ Group shall timely exercise all or any portion of the
Purchase Option and purchase up to 23,809,524 Option Shares in
accordance with Section 1 above, the ▇▇▇▇▇▇▇ Group hereby grants
unto Recovery Capital or its designees (with Recovery, the
"Recovery Group") an irrevocable option (the "Call Option"),
exercisable in whole or in part by the Recovery Group at any
time commencing February 1, 2010 and ending March 31, 2010
(the "First Call Option Period") to purchase all or any
portion of the Option Shares from the ▇▇▇▇▇▇▇ Group for a
purchase price of $0.50 per share (the "First Call Option
Price"), or at any time commencing April 1, 2010 and ending
June 30, 2010 (the "Second Call Option Period") for a purchase
price of $0.75 per share (the "Second Call Option Price").
The Call Option may be exercised on one or more occasions
during the First Call Option Period or the Second Call Option
Period by written notice given by the Recovery Group to the
▇▇▇▇▇▇▇ Group (the "Call Option Notice").
In the event and to the extent that the Recovery Group
shall timely exercise the Call Option, it shall pay to the
▇▇▇▇▇▇▇ Group in cash or by wire transfer of immediately
available funds an amount equal to (i) the number of Option
Shares purchased upon exercise of the Call Option multiplied
by (ii) the Call Option Price per share, within ten (10) Business
Days after the Recovery Group's delivery of the Call Option Notice
to the ▇▇▇▇▇▇▇ Group of exercise of the Call Option. Upon receipt
of the foregoing payment, the ▇▇▇▇▇▇▇ Group shall cause to deliver
to the Recovery Group stock certificates evidencing all, and not
less than all, of the Option Shares being purchased upon exercise of
such Call Option, duly endorsed for transfer to the Recovery Group.
3. Put Option. In the event and to the extent that (i)
the ▇▇▇▇▇▇▇ Group shall timely exercise the Purchase Option in
accordance with Section 1 above, and (ii) the First and Second
Call Option Periods shall have expired without the Recovery
Group having purchased up to the 23,809,524 Option Shares at
the First or Second Call Option Price, whichever is applicable,
from the ▇▇▇▇▇▇▇ Group, to the extent that the ▇▇▇▇▇▇▇ Group
shall continue to own of record any Option Shares, during the five
(5) month period commencing July 31, 2010 and ending December
31, 2010 (the "Put Option Period"), the ▇▇▇▇▇▇▇ Group shall
have the irrevocable right and option, but not the obligation
(the "Put Option") to sell to Rineon Group, Inc., a Nevada
corporation ("Rineon") and, by its execution of this Agreement,
Rineon shall be obligated to purchase, for a purchase price of
$0.25 per Option Share (the "Put Option Price"), all and not
less than all of the remaining Option Shares owned by the
▇▇▇▇▇▇▇ Group during the Put Option Period. Unless otherwise
agreed by ▇▇▇▇▇▇, the Put Option may be exercised on only
one occasion during the Put Option Period, and may be
exercised by written notice given by the ▇▇▇▇▇▇▇ Group to
Rineon (the "Put Option Notice").
In the event and to the extent that the ▇▇▇▇▇▇▇ Group
shall timely exercise the Put Option, Rineon shall pay to
the ▇▇▇▇▇▇▇ Group in cash or by wire transfer of immediately
available funds an amount equal to the number of Option
Shares required to be purchased upon exercise of the Put
Option multiplied by the Put Option Price per share, within
ten (10) Business Days after the ▇▇▇▇▇▇▇ Group's delivery of
the Put Option Notice to Rineon of exercise of the Put Option.
Upon receipt of the foregoing payment, the ▇▇▇▇▇▇▇ Group
shall deliver to Rineon stock certificates evidencing all,
and not less than all, of the Option Shares being purchased
upon exercise of such Put Option, duly endorsed for
transfer to Rineon.
4. Additional agreement of the Parties. Each of
▇▇▇▇.▇▇▇, the ▇▇▇▇▇▇▇ Group, the Recovery Group and Rineon
(collectively, the "Parties") do hereby agree, as follows:
4.1. Allocation of the Options. The Purchase
Option, the Call Option and the Put Option (collectively,
the "Options") may be exercised by and among the Optionholder
in such amounts or proportions as such Optionholder shall
advise the other Parties in writing.
4.2. No Defaults. At the time of exercise of the
Option, and as a condition to such exercise, all defaults,
if any, under any loan agreement or other secured debt
obligations of FNDM owed to IPG or EMAC shall have been cured
or waived, and the ▇▇▇▇▇▇▇ Group shall receive an opinion of
counsel to FNDM to such effect.
4.3. Waivers. The waiver of a breach of this
agreement or the failure of any Party hereto to exercise any
right under this agreement shall in no way constitute waiver
as to future breach whether similar or dissimilar in nature or
as to the exercise of any further right under this agreement.
4.4. Amendment. This agreement may be amended or
modified only by an instrument of equal formality signed by
the Parties or the duly authorized representatives of the
respective parties.
4.5. Assignment. This agreement is not assignable
except by operation of law or agreement of the Parties;
provided that the Recovery Group may assign any portion of
its rights under the Call Option to any entity or other
person; each of whom shall be deemed an Optionholder hereunder;
provided, that any such assignment by the Recovery Group shall
not relieve it of its respective obligations under the Call
Option.
4.6. Notice. Until otherwise specified in writing,
the mailing addresses and fax numbers of the parties of this
agreement shall be made to the addresses set forth in this
Agreement. Any notice or statement given under this agreement
shall be deemed to have been given if sent by registered mail
addressed to the other party at the address indicated above or
at such other address which shall have been furnished in
writing to the addressor.
4.7. Governing Law. This agreement shall be
construed, and the legal relations between the parties determined,
in accordance with the laws of the State of Delaware, thereby
precluding any choice of law rules which may direct the
application of the laws of any other jurisdiction.
4.8. Publicity. No publicity release or announcement
concerning this agreement or the transactions contemplated hereby
shall be issued by either party hereto at any time from the
signing hereof without advance approval in writing of the form
and substance by the other party.
4.9. Entire agreement. This Agreement contains the
entire agreement among the Parties with respect to the transactions
contemplated hereby, and supersedes all prior agreements, written
or oral, with respect hereof.
4.10. Headings. The headings in this agreement are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
4.11. Severability of Provisions. The invalidity or
unenforceability of any term, phrase, clause, paragraph, restriction,
covenant, agreement or provision of this agreement shall
in no way affect the validity or enforcement of any other provision
or any part thereof.
4.12. Counterparts. This agreement may be executed in
any number of counterparts, each of which when so executed, shall
constitute an original copy hereof, but all of which together shall
consider but one and the same document.
4.13. Binding Effect. This Agreement shall be binding
upon the parties hereto and inure to the benefit of the Parties,
their respective heirs, administrators, executors, successors and assigns.
If the foregoing accurately represents the substance of our
mutual agreement and understanding, please so indicate by executing
and returning a copy of this agreement in the space provided below.
Very truly yours,
▇▇▇▇.▇▇▇ INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ President and CEO
ACCEPTED AND AGREED TO:
▇▇▇▇▇▇▇ FAMILY INVESTMENTS, LLC
By:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Manager
RECOVERY CAPITAL, INC.
Address:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
RINEON GROUP, INC.
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
The foregoing assignment of the Option
is acknowledged and agreed:
IP GLOBAL INVESTORS, LTD.
Address:
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
