Exhibit 10.1
JAG Media Holdings, Inc.
6865 S.W. 18th Street, Suite B13
Boca Raton, FL 33433
January 24, 2007
Cryptometrics, Inc.
73 Main Street
Tuckahoe, NY 10707

Re:   Agreement and Plan of Merger Among JAG Media Holdings, Inc. (“JAG Media”),
Cryptometrics Acquisition, Inc., Cryptometrics, Inc. (“Cryptometrics”), Robert
Barra and Michael Vitale dated December 27, 2005 (“Merger Agreement”)

Gentlemen:
This will serve to confirm our understanding that the Merger Agreement is
amended as follows:
1. The first paragraph of Section 2.1 of the Merger Agreement is deleted in its
entirety and a new paragraph will be substituted therefore, which shall read as
follows:
     2.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Sub, Company or any
stockholder of Company (each such stockholder, a “Company Stockholder”):
     The holders of all shares of common stock of Company, par value $0.001 per
share (the “Company Common Stock”) (each such share of Company Common Stock, a
“Company Share”), issued and outstanding immediately prior to the Effective
Time, including as outstanding for this purpose the total number of shares of
Company Common Stock for which outstanding exchangeable shares of the Company’s
Canadian subsidiary can be exchanged (“Outstanding Company Common Stock” and
each an “Outstanding Company Share”) shall be entitled to receive shares of
fully paid and nonassessable common stock of Parent, par value $0.00001 per
share (“Parent Common Stock”) aggregating 394,700,016 shares of Parent Company
Common Stock (the “Merger Consideration”).
2. Sub-section (B) of Section 2.2 (g) of the Merger Agreement shall be deleted
in its entirety and a new sub-section (B) shall be substituted therefore, which
shall read as follows:
... (B) subject to compliance with securities laws, the remaining 35% of such
shares may be freely sold or transferred even within the first year following
the Closing Date.

 

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Cryptometrics, Inc.
January 24, 2007
Page -2-
3. The condition to Closing specified in Section 8.1 (e) of the Merger
Agreement, which requires the listing of the Parent Common Stock on the NASDAQ
Capital Market as a condition to the closing and the related termination right
specified in Section 9.1 (a) (iv) (C) are hereby waived by the parties.
Accordingly, Sections 8.1 (e) and 9.1 (a) (iv) (C) are deleted in their entirety
and new provisions shall be substituted therefore, which shall read as follows:
8.1 (e) The shares of Parent Common Stock shall have been authorized for trading
on the OTC Bulletin Board (“OTCBB”) or the OTC Pink Sheets (“Pink Sheets”)
whether or not such authorization shall have been cancelled.
9.1 (a) (iv) (C) if Parent Common Stock is not authorized for trading on the
OTCBB or Pink Sheets on or prior to the Effective Time.
4. Cryptometrics hereby approves that certain letter agreement between JAG Media
and Cornell Capital Partners, LP (“Cornell Capital”) dated January 24, 2007
(“Cornell Letter Agreement”), which provides for certain modifications to the
debentures and warrants currently held by Cornell Capital and agrees that the
indebtedness limitation (including any descriptions of convertible debenture of
JAG Media), whether in the form of representations, covenants or conditions,
contained in the Merger Agreement shall be increased from the principal amount
of $2,750,000 to the principal amount of $4,350,000.
5. Simultaneously with the execution of this agreement, Cryptometrics shall pay
(a) the $100,000.00 payment required pursuant to paragraph 14 of that certain
term sheet dated September 9, 2006 between JAG Media and Cryptometrics and (b)
$175,000 ($10,000 of which has already been advanced by Cryptometrics), to be
used by JAG Media for legal, accounting, printing and other costs incurred by
JAG Media in connection with (i) the Closing; (ii) the preparation and filing of
any supplements and/or post-effective amendments to the S-4 Registration
Statement; (iii) the preparation and filing of JAG Media’s Form 10-QSB for its
quarter ending October 31, 2006; (iv) the preparation and filing of this
agreement, the Cornell Letter Agreement, any related agreements or documents and
any related press releases; and (v) any SEC filings and press releases required
or desirable in connection with any of the foregoing. Such payments, totaling
$275,000.00, shall be made by Cryptometrics via wire transfer in accordance with
the written wire instructions dated December 1, 2006 that have been furnished to
Cryptometrics by JAG Media.
6. Cryptometrics has completed its audited financials for its fiscal year ended
April 30, 2006 and its unaudited financials for its quarter ended July 31, 2006
and shall provide JAG Media with copies of such financials upon execution of
this agreement. Cryptometrics’ accountants are currently in the process of
completing its unaudited financials for its quarter ended October 31, 2006 which
financials shall be completed no later than January 26, 2007, at which time
Cryptometrics shall provide JAG Media with a copy of such unaudited financials.
7. Promptly after the execution of this agreement and payment of the $275,000.00
payment referenced in paragraph 5 above, JAG Media shall cause to be prepared,
for Cryptometrics’ prompt review, an appropriate post-effective amendment to the
S-4 Registration Statement, which shall

 

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Cryptometrics, Inc.
January 24, 2007
Page -3-
include pro forma financials for JAG Media and Cryptometrics based on relevant
audited and unaudited financials for both companies (“Post-Effective
Amendment”). No later that three (3) business days after the Post-Effective
Amendment has been declared effective by the U.S. Securities and Exchange
Commission, Cryptometrics shall mail the Information Statement and Prospectus
included in the Post-Effective Amendment to its stockholders and obtain the
written consent of a majority of the stockholders of Cryptometrics to the Merger
(“Cryptometrics Stockholders’ Consent”). A copy of the Cryptometrics
Stockholders’ Consent shall be delivered to JAG Media no later than two (2) days
after its execution. After JAG Media receives the Cryptometrics Stockholders’
Consent, JAG Media shall immediately (a) rescind the amendments to its By-Laws
adopted by an instrument dated March 22, 2006 (“Rescinded By-Law Amendment”);
(b) cause to be formed a new limited liability company into which Cryptometrics,
Inc. can be merged after it’s merger with Cryptometrics Acquisition, Inc.; and
(c) have its attorneys prepare the certificates of merger for the Merger and the
merger referred to in paragraph 7 (b) hereof (along with related resolutions or
written consents) and filing instructions therefor, the filing of which will be
an assumption of the tax opinion. The documents in connection with the formation
of the limited liability company described in 7 (b) above (along with any
related resolutions or written consents) and the form of certificate of merger
for the merger referred to in paragraph 7 (b) hereof shall be delivered to
Cryptometrics at or prior to the time the Merger Documents (as hereinafter
defined) are delivered to the “Escrow Agent.”
8. Subject to satisfaction or waiver of the conditions to the Closing set forth
in the Merger Agreement, the Closing Date shall be February 28, 2007, or such
other date as the parties may agree upon. On the Closing Date and as an integral
part of the Merger, Cryptometrics Inc., as the surviving Company of the Merger,
shall immediately merge into a limited liability company wholly-owned by JAG
Media.
9. If the Closing does not occur for any reason by March 15, 2007 the Merger
Agreement shall automatically terminate, unless the parties agree otherwise in
writing (“Automatic Termination Date”). Any such termination of the Merger
Agreement shall be deemed a termination pursuant to Section 9.1 (a) (i) of the
Merger Agreement.
10. (A) Within three (3) business days after the effective date of the
Post-Effective Amendment, JAG Media shall deliver to Karlen & Stolzar, LLP, as
escrow agent (“Escrow Agent”), (i) a certificate of merger effecting the merger
of Cryptometrics Acquisition, Inc. into Cryptometrics, Inc. (“Certificate of
Merger”); (ii) a resolution or written consent of the Board of Directors of JAG
Media approving the Merger, including any new or amended terms reflected in this
agreement or any subsequent written agreement signed by the parties to the
Merger Agreement, and authorizing JAG Media, as the sole stockholder of
Cryptometrics Acquisition, Inc., to approve the merger of Cryptometrics
Acquisition, Inc. into Cryptometrics, Inc. and sign the Certificate of Merger;
(iii) resolutions or written consents of the sole shareholder and Board of
Directors of Cryptometrics Acquisition, Inc. approving the merger of
Cryptometrics Acquisition, Inc. into Cryptometrics and authorizing the signature
and filing of the Certificate of Merger; (iv) a resolution or written consent of
the board of directors of JAG Media electing Robert Barra and Michael Vitale as
the only members of the board of directors of JAG Media, conditioned upon the
effectiveness of the Merger; (v) written resignations of Messers. Thomas J.
Mazzarisi and Stephen

 

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Cryptometrics, Inc.
January 24, 2007
Page -4-
J. Schoepfer from their positions as directors, officers and members of JAG
Media and its subsidiaries, effective immediately upon the filing of the
Certificate of Merger; (vi) the tax opinion to be provided by JAG Media’s
attorneys pursuant to the Merger Agreement; and (vii) the Rescinded By-Law
Amendment and Cryptometrics shall deliver to Escrow Agent any Affiliate
Agreements required to be delivered pursuant to the Merger Agreement
(“collectively, the “Merger Documents”).
      (B) Escrow Agent shall hold the Merger Documents in escrow until the first
to occur of the following: (i) the Closing not occurring by the Automatic
Termination Date; (ii) the Merger Agreement being terminated by either JAG Media
or Cryptometrics; or (iii) delivery of the Closing Notice (as hereinafter
defined) prior to the Automatic Termination Date. In the event of either of the
occurrences set forth in items (B) (i) or (ii) above, the Merger Documents shall
be immediately returned to JAG Media by Escrow Agent. In the event Cryptometrics
delivers the Closing Notice (as hereinafter defined) to JAG Media and Escrow
Agent and the Closing occurs prior to the Automatic Termination Date, the Merger
Documents shall be delivered immediately to Cryptometrics by Escrow Agent and
Cryptometrics shall cause the Certificate of Merger to be immediately filed in
the appropriate government office(s) in the appropriate state jurisdiction(s)
that same day. “Closing Notice” means the signed written notice from
Cryptometrics to JAG Media and Escrow Agent notifying them (via facsimile and
e-mail) that Cryptometrics has irrevocably elected to proceed with the Closing
and instructing Escrow Agent to release the Merger Documents from escrow in
accordance with this agreement, which notice shall be in the form and substance
attached hereto as ANNEX 1.
      (C) Escrow Agent shall date all Merger Documents as of the date of filing
of the Certificate of Merger and Escrow Agent shall provide JAG Media a copy of
the filed and stamped Certificate of Merger and the remaining Merger Documents,
as dated by Escrow Agent, promptly after the filing of the Certificate of
Merger. Further, upon the filing of the Certificate of Merger, Cryptometrics
shall immediately provide JAG Media with a notification via e-mail confirming
that the Certificate of Merger has been filed and the date and time of such
filing. Such e-mail notification shall be sent to Thomas J. Mazzarisi at
tjmazzarisi@jagmedia.biz, with a copy to Stephen J. Schoepfer at
steve@jagnotes.com.
      (D) Notwithstanding (i) anything to the contrary set forth in this
agreement and (ii) receipt by Escrow Agent of any instructions from
Cryptometrics to release the Merger Documents from escrow, Escrow Agent shall
not release the Merger Documents from escrow prior to the expiration of fifteen
(15) days from the date the Information Statement and Prospectus included in the
Post-Effective Amendment is mailed by Cryptometrics to its stockholders.
      (E) Escrow Agent’s duties and liabilities shall be limited as follows:
(i) The duties and responsibilities of Escrow Agent hereunder shall be
determined solely by the express provisions of this paragraph 10, and no other
or further duties or responsibilities shall be implied.
(ii) Escrow Agent may rely and shall be protected in acting or refraining from

 

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Cryptometrics, Inc.
January 24, 2007
Page -5-
acting upon any written notice, instruction or request provided for and
furnished to it pursuant to the terms of this paragraph 10 and believed by it to
be genuine and to have been signed or presented by the proper party or parties.
Escrow Agent shall be under no duty to inquire into or investigate the validity,
accuracy or content of any document or agreement. Escrow Agent shall have no
duty to solicit any item that may be due it hereunder.
(iii) Escrow Agent shall not be liable for any action taken or omitted by it in
good faith unless a court of competent jurisdiction determines that Escrow
Agent’s willful misconduct or gross negligence was the cause of any loss to
either of the parties.
(iv) In the event of any disagreement relating to the Merger Documents or the
disposition thereof resulting in adverse claims or demands being made in
connection with the Merger Documents, or in the event that the Escrow Agent is
in doubt as to what action it should take hereunder, Escrow Agent shall be
entitled to retain the Merger Documents until Escrow Agent shall have received a
final non-appealable order of a court of competent jurisdiction directing
delivery of the Merger Documents, in which event Escrow Agent shall deliver the
Merger Documents in accordance with such order without further question. If a
proceeding for such determination is not begun and diligently continued, Escrow
Agent may make an ex parte application, or bring any appropriate action, for
leave to deposit the Merger Documents in the Supreme Court of the State of New
York, County of New York seeking such determination or such declaratory relief
as Escrow Agent shall deem reasonably necessary under the circumstances, and the
parties each hereby irrevocably consent to the entering of an ex parte order
pursuant to all applicable laws, rules and procedures of the State of New York
and such court. Escrow Agent shall be reimbursed by Cryptometrics and JAG Media
for all of Escrow Agent’s reasonable costs and expenses of such action or
proceeding, including, without limitation, reasonable attorneys’ fees and
disbursements, which reimbursable costs and expenses shall be shared equally by
Cryptometrics and JAG Media.
(v) Escrow Agent may at any time resign by giving ten (10) days written notice
of resignation to JAG Media and Cryptometrics. Upon receiving such notice of
resignation, JAG Media and Cryptometrics shall promptly appoint a successor and,
upon the acceptance by the successor of such appointment, release the resigning
Escrow Agent from its obligations hereunder by written instrument, a copy of
which instrument shall be delivered to the resigning Escrow Agent and the
successor. If no successor shall have been so appointed and have accepted
appointment within forty-five (45) days after the giving of such notice of
resignation, the resigning Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor.
11. Upon request of any parties to the Merger Agreement delivered no later than
ten (10) business days following the execution of this agreement by all the
parties hereto, the parties to the Merger Agreement shall furnish to each other
their respective disclosure schedules pursuant to the

 

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Cryptometrics, Inc.
January 24, 2007
Page -6-
Merger Agreement no later than ten (10) business days following the delivery of
the foregoing request. Any such request by JAG Media shall be made by e-mail to
Robert Barra (rbarra@cryptometrics.com) and any such request by Cryptometrics
shall be made by e-mail to Thomas J. Mazzarisi (tjmazzarisi@jagmedia.biz). Any
such request by JAG Media shall also be deemed a request to Messers Barra and
Vitale individually as parties to the Merger Agreement.
12. Thomas J. Mazzarisi and Stephen J. Schoepfer agree that they shall not
exercise their options to acquire JAG Media common stock (“Options”) prior to
the first to occur of the Closing, the Automatic Termination Date or the
termination of this agreement. Nothing herein shall restrict Messrs. Mazzarisi
and Schoepfer from exercising their Options (or selling the shares underlying
the Options) on or after the Closing Date or the termination of this agreement.
13. If JAG Media terminates the Merger Agreement prior to the Automatic
Termination Date, JAG Media shall issue to Cryptometrics 500,000 shares of
Parent Common Stock.
14. JAG Media shall publicly disclose the contents of this agreement on a
Form 8-K or other suitable form within four (4) business days of its execution.
All defined terms used in this agreement, which are not otherwise defined herein
shall have the meaning ascribed to them in the Merger Agreement. Except as
otherwise set forth in this agreement, the Merger Agreement shall remain
unchanged and in full force and effect.
If the foregoing accurately reflects your understanding of our agreements
regarding the above matters, please indicate your agreement and acceptance by
signing in the appropriate space below and returning a fully executed and dated
copy of this agreement to the undersigned.
[SIGNATURES APPEAR ON NEXT PAGE]

 

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Cryptometrics, Inc.
January 24, 2007
Page -7-

                      Sincerely yours,       AGREED AND ACCEPTED:     JAG MEDIA
HOLDINGS, INC.       CRYPTOMETRICS ACQUISITION, INC.      
By:
  /s/ Thomas J. Mazzarisi       By:   /s/ Thomas J. Mazzarisi    
 
 
 
Name: Thomas J. Mazzarisi          
 
Name: Thomas J. Mazzarisi    
 
  Title: Chairman & CEO           Title: President    
 
  Date: January 25, 2007           Date: January 25, 2007    
 
                    AGREED AND ACCEPTED:
CRYPTOMETRICS, INC.       The undersigned agrees to act as “Escrow Agent”
pursuant to the provisions of paragraph 10 above
 
                                KARLEN & STOLZAR, LLP    
By:
  /s/ Robert Barra                
 
 
 
Name: Robert Barra
Title: Co-CEO
Date: January 26, 2007                
 
          By:   /s/ Michael I. Stolzar    
 
             
 
Name: Michael I. Stolzar    
 
              Title: Partner    
 
              Date: January 26, 2007    
 
                                The undersigned are signing this agreement only
with respect to their obligations set forth in paragraph 12 above
 
  /s/ Robert Barra                                  
 
  Robert Barra                
 
  Dated: January 26, 2007                
 
                   
 
              /s/ Thomas J. Mazzarisi                      
 
              Thomas J. Mazzarisi    
 
              Dated: January 25, 2007    
 
  /s/ Michael Vitale                                  
 
  Michael Vitale                
 
  Dated: January 26, 2007                
 
                   
 
              /s/ Stephen J. Schoepfer                      
 
              Stephen J. Schoepfer    
 
              Dated: January 25, 2007    

 

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ANNEX 1
[CRYPTOMETRICS LETTERHEAD]
                    , 2007
VIA FACSIMILE (866.297.1070)
& E-MAIL (TJMAZZARISI@JAGMEDIA.BIZ)
JAG Media Holdings, Inc.
6865 S.W. 18th Street, Suite B13
Boca Raton, FL 33433

Attention:   Thomas J. Mazzarisi
Chairman & CEO

-and-
VIA FACSIMILE (914.682.0387)
& E-MAIL (MISTOLZAR@KARLENSTOLZAR.COM)
Karlen & Stolzar, LLP
White Plains Plaza
One North Broadway — Suite 800
White Plains, NY 10601
Attention: Michael I. Stolzar, Esq.

Re:   Letter Agreement dated January 24, 2007 Among JAG Media Holdings, Inc.
(“JAG Media”), Cryptometrics, Inc. (“Cryptometrics”), Cryptometrics Acquisition,
Inc., Robert Barra, Michael Vitale and Karlen & Stolzar, LLP, as escrow agent
thereunder (“Escrow Agent”), which amended various terms of the Agreement and
Plan of Merger Among JAG Media, Cryptometrics and Cryptometrics Acquisition,
Inc. dated December 27, 2005 (“Amendment”)

Gentlemen:
This will serve as Cryptometrics’ written notice, pursuant to paragraph 10 of
the Amendment, that Cryptometrics is hereby irrevocably (i) electing to proceed
with the Closing and (ii) instructing Escrow Agent to release the “Merger
Documents” from escrow in accordance with the Amendment.

 

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Cryptometrics acknowledges and agrees that it shall receive and accept the
“Merger Documents” from Escrow Agent and perform its obligations with respect to
the “Merger Documents” as set forth in the Amendment.
Very truly yours,
CRYPTOMETRICS, INC.

         
By:
       
 
 
 
Name: Robert Barra    
 
  Title: Co-CEO    

Cc: Stephen J. Schoepfer (Fax: 866.297.1072/E-Mail: steve@jagnotes.com)