Item 1.01 Entry into a Material Definitive Agreement
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(a)
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G Series Settlement and Mutual Release Agreement
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On October 24, 2017, the Company entered into a settlement and mutual release agreement (the “G Series Settlement Agreement”) with the holders of the Company’s Series G Preferred Stock other than (i) affiliates of
Robert F.X. Sillerman (“Mr. Sillerman”)
and (ii) the law firm that served as outside counsel to the Company in connection with the offering of the Series G Preferred Stock (the “Holders”).
Pursuant to the terms of the G Series Settlement Agreement, in exchange for the release and discharge of Company’s obligations under the Series G subscription agreements, the Company agreed to deposit with the escrow agent cash in an aggregate amount of $3,179,608.00 payable to the Holders in monthly installments (the “Installment Payments” and each, an “Installment Payment”). Each of the Company and Mr. Sillerman also agreed to execute a confession of judgment (each such confession, a “G Series Confession of Judgment”) acknowledging the debt owed to the Holders and to deliver their respective G Series Confessions of Judgments to the escrow agent in accordance with that certain escrow agreement, dated as of October 24, 2017, by and among the Company, Mr. Sillerman, the escrow agent and the Holders (the “G Series Escrow Agreement”).
The G Series Settlement Agreement provides that if an aggregate amount equal to the sum of the initial four Installment Payments due to the Holders has been received by the escrow agent on or before January 24, 2018, the escrow agent will immediately return the G Series Confessions of Judgment to each of the Company and Mr. Sillerman.
In connection with the G Series Settlement Agreement, Mr.
Sillerman executed a personal guaranty for the benefit of the Holders (the “G Series Guaranty Agreement”) pursuant to which he guaranteed the performance of Company’s obligations under the G Series Settlement Agreement.
The foregoing descriptions of the G Series Settlement Agreement and the G Series Guaranty Agreement are not complete and are qualified in their entirety by reference to the full text of the form of the G Series Settlement Agreement and the G Series Guaranty Agreement filed herewith as Exhibits 10.1 and 10.2, respectively.
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(b)
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Rant Note and Securities Purchase and Mutual Release Agreement
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As previously reported on
the Current Report on Form 8-K filed on April 19, 2017, on April 18, 2017, the Company entered into
the Note Exchange Agreement, by and between the Company and the holder of the Rant Note (the “Rant Noteholder”
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, pursuant to which the Company issued to the Rant Noteholder (a) a
$3,240,000.00 12% Senior Convertible Note due June 1, 2017 (the “Rant Note”)
and (b) 440 shares of the Company’s Series F Convertible Preferred Stock, par value $0.001 per share (the “Series F Convertible Preferred Stock”).
As previously
reported on the Current Report on Form 8-K filed on June 8, 2017,
the Company defaulted on
the Rant Note
and became obligated to pay the mandatory default amount in cash or by conversion into shares of the Company’s common stock.
On October 24, 2017, the Company entered into a note and securities purchase and mutual release agreement (the “Rant Settlement Agreement”) with the Rant Noteholder.
Pursuant to the Rant Settlement Agreement, in exchange for the release and discharge of Company’s obligations under the Rant Note and the Series F Convertible Preferred Stock, the Company agreed to pay to the escrow agent an aggregate amount of $3,000,000.00 representing installment payments owed to the Rant Noteholder (the “Rant Installment Payments” and each, a “Rant Installment Payment”) in accordance with the provisions of that certain escrow agreement, dated as of October 24, 2017, by and among the Company, Mr. Sillerman, the escrow agent and the Rant Noteholder (the “Rant Escrow Agreement”). If the Rant Noteholder has not received an amount equal to the initial seven Rant Installment Payments on or before the seventh (7
th
) month anniversary of the Rant Settlement Agreement, the amounts owed thereunder will automatically increase to $4,000,000.00. Each of the Company and Mr. Sillerman agreed to execute confessions of judgment (each such confession, a “Rant Confession of Judgment”) acknowledging the debt
owed to the Rant Noteholder and to deliver their respective Rant Confessions of Judgments to the escrow agent in accordance with the Rant Escrow Agreement.
The Rant Settlement Agreement provides that if an aggregate amount equal to the sum of the initial four Rant Installment Payments has been received by the escrow agent on or before January 24, 2018, the escrow agent will immediately return the Rant Confessions of Judgment to each of the Company and Mr. Sillerman. In connection with the Rant Settlement Agreement, Mr.
Sillerman executed a personal guaranty for the benefit of the Rant Noteholder (the “Rant Guaranty Agreement”) pursuant to which he guaranteed the performance of Company’s obligations under the Rant Settlement Agreement.
The foregoing descriptions of the Rant Settlement Agreement and the Rant Guaranty Agreement are not complete and are qualified in their entirety by reference to the full text of the form of the Rant Settlement Agreement and the Rant Guaranty Agreement filed herewith as Exhibits 10.3 and 10.4, respectively.