Exhibit 10.1
 
AGREEMENT

This Agreement (“Agreement”) is entered into on March 6, 2009 (the “Effective
Date”) among AdEx Media Inc. (“AdEx”), a Delaware corporation, Digital Equity
Partners, LLC (“DEP”), a Colorado limited liability company, and the former
members of Digital Instructor, LLC, a Colorado limited liability company (“DI”)
listed on the signature page hereto (each a “Member” and collectively, the
“Members”).

RECITALS

1. AdEx and the Members entered into that Membership Interest Purchase Agreement
dated August 12, 2008 (the “Purchase Agreement”), attached hereto as Exhibit A
and incorporated by reference, in which AdEx purchased all the issued and
outstanding membership interests in DI from the Members pursuant to the terms
set forth in Purchase Agreement;
 
2. AdEx and DEP entered into a Senior Secured Promissory Note dated August 12,
2008 (the “Note”) attached hereto and incorporated herein by reference as
Exhibit B, in which AdEx agreed to pay DEP the principal sum of Five Hundred
Thousand Dollars ($500,000) without interest as part of the consideration set
forth in the Purchase Agreement;
 
3. AdEx and DEP entered into a Security Agreement dated August 12, 2008 (the
“Security Agreement”) attached hereto and incorporated herein by reference as
Exhibit C in which AdEx’s obligations under the Note are secured by the grant to
DEP of a first priority security interest in the Collateral (as defined in the
Security Agreement);
 
4. On February 12, 2009, AdEx and DEP entered into a First Amendment of the
Note, a copy of which is attached hereto and incorporated herein by reference as
Exhibit D-1 (the “First Amendment”), in which the Maturity Date of the Note was
extended to February 26, 2009;
 
5. On February 26, 2009, AdEx and DEP entered into a Second Amendment of the
Note, a copy of which is attached hereto and incorporated herein by reference as
Exhibit D-2 (the “Second Amendment”), in which the Maturity Date of the Note was
extended to March 9, 2009;
 
6. DEP desires to surrender the Note, as amended, and AdEx desires to issue to
DEP in exchange for the Note (i) a new note payable to DEP in the principal
amount of $255,000 substantially in the form attached hereto as Exhibit E (the
“New Note”) and (ii) a cash payment of $245,000 on the Effective Date (the “Cash
Payment”) pursuant to the terms and conditions set forth herein;
 
7. AdEx and DEP desire to amend the Security Agreement to reflect DEP’s amended
security interest in the principal amount of $255,000 under the New Note;
 
8. Pursuant to Section 2.2.4 of the Purchase Agreement, AdEx is obligated to pay
in cash to the Members the Earn Out (as defined in the Purchase Agreement)
following the expiration of the Earn Out Period (as defined in the Purchase
Agreement), as part of the consideration set forth in the Purchase Agreement;
 
 
 
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9. AdEx and the Members desire to amend the terms of the Purchase Agreement with
respect to the Earn Out and the Earn Out Period and certain other provisions as
set forth herein.
 
AGREEMENT
 
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:

1. Surrender and Cancellation of the Note. In consideration for (i) AdEx’s
payment of the Cash Payment to DEP on the Effective Date and (ii) the issuance
of the New Note, DEP shall surrender the Note to AdEx and AdEx shall cancel the
Note.
 
1.1 Delivery by DEP. On the Effective Date, DEP shall deliver to AdEx (i) the
original Note, (ii) an executed copy of this Agreement, (iii) an executed copy
of an Amended and Restated Operating Agreement of DEP substantially in the form
attached hereto as Exhibit F, and (iv) documents, notices, termination
statements or other documents and papers as may be reasonably necessary and
requested by AdEx to release the Collateral (as defined in the Security
Agreement) from the security interest granted to DEP in the Security Agreement
except as necessary to secure AdEx’s obligations under the New Note.
 
1.2 Delivery by AdEx. On the Effective Date, AdEx shall deliver to DEP (i) the
original New Note duly executed, (ii) an executed copy of this Agreement and
(iii) the Cash Payment.
 
2. Creation of New Note; Amendment of Purchase Agreement.
 
2.1 Upon surrender and cancellation of the Note, AdEx shall issue the New Note
payable to DEP in the principal amount of $255,000, substantially in the form
attached hereto as Exhibit E.
 
2.2 The Purchase Agreement is hereby amended such that all references to the
Note in the Purchase Agreement shall hereinafter be deemed to refer to the New
Note.
 
3. Amendment of Security Agreement. AdEx and DEP agree that the second recital
of the Security Agreement attached hereto as Exhibit C is hereby amended as
follows: The figure “$500,000” in the last sentence is hereby deleted in its
entirety and replaced with “$255,000”, such that AdEx’s $255,000 obligation
under the New Note will continue to be secured by the Collateral under the
Security Agreement. Unless and until AdEx has disbursed to DEP all amounts
payable pursuant to the New Note, AdEx shall not (i) dissolve DI or otherwise
cause DI to cease to exist, (ii) encumber or otherwise transfer the assets of
DI, or (iii) encumber the Collateral (as defined in the Security Agreement). For
the avoidance of doubt, it is the intention of the parties that the Security
Agreement remain in full force and effect with respect to the New Note and
continue to give DEP a first priority security interest in the Collateral.
 
 
 
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4. Amendment to Earn Out Provisions. In consideration for the New Note and the
Cash Payment to DEP as well as the mutual release set forth herein, the Purchase
Agreement is hereby amended as follows:

4.1 Amendment to Section 2.2.4. Section 2.2.4 of the Purchase Agreement is
hereby deleted in its entirety and replaced with the following:
 
“2.2.4                      An additional amount (the “Earn Out”) of up to Three
Hundred Fifty Thousand Dollars ($350,000) payable in cash to the Members, other
than Dennis Hefter (“Hefter”), following the expiration of the period commencing
on the Closing Date and ending on that date that is twelve (12) months from the
Closing Date (the “Earn Out Period”) based on the Company achieving certain
gross revenue performance milestones as further set forth on Schedule C, subject
to the following:”
 
4.2 Amendment to Section 2.2.4(a).  Section 2.2.4(a) of the Purchase Agreement
shall remain unchanged and as set forth in the Purchase Agreement, except that
all references to the Earn Out Period in such subsection shall be deemed to
equally apply to the Hefter Earn Out Period (as defined below).
 
4.3 Amendment to Section 2.2.4(b).  Section 2.2.4(b) of the Purchase Agreement
is deleted in its entirety and replaced with the following:
 
“(b) Buyer shall have no obligation to pay the Earn Out or the Hefter Earn Out
(as defined below) in the event that Buyer terminates Hefter for Cause during
the Earn Out Period.  Buyer shall have no obligation to pay the Hefter Earn Out
in the event that Buyer terminates Hefter for Cause during the Hefter Earn Out
Period but after the expiration of the Earn Out Period.  “Cause” shall have the
meaning as defined in that certain Employment Agreement by and between Buyer and
Hefter (the “Employment Agreement”) substantially in the form as set forth on
Exhibit 4.”
 
4.4 Amendment to Schedule C.  Schedule C to the Purchase Agreement is hereby
deleted in its entirety and replaced by the revised Schedule C attached hereto
as Exhibit G.
 
4.5 Hefter Earn Out.  Section 2.2.5 is added to the Purchase Agreement in its
entirety as follows:
 
“2.2.5                      An additional amount (the “Hefter Earn Out”) up to
One Hundred Fifty Thousand Dollars ($150,000) payable in cash to Hefter
following the expiration of the period commencing on February 12, 2009 and
ending on February 12, 2010 (the “Hefter Earn Out Period”) based on the Company
achieving certain gross revenue performance milestones as further set forth on
Schedule D, subject to subsections 2.2.4(a) and (b).

4.6 Addition of Schedule D.  Schedule D is hereby added to the Purchase
Agreement in the form attached hereto as Exhibit H.
 
 
 
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5. Mutual Release.  Each of AdEx, DEP and the Members do hereby mutually
release, acquit and forever discharge each other, their respective parents,
subsidiaries, successors and assigns and each of their respective directors,
officers, members, managers, agents, shareholders, employees, and affiliates,
from any and all present, accrued and actionable demands, actions, causes of
actions, and claims known to the releasing party arising out of the Purchase
Agreement prior to the date of this Agreement, whether based on tort, contract,
equity or any other theory of recovery, and whether for compensatory or
exemplary damages or other relief or damages, whether such damages are known or
unknown, or liquidated or unliquidated. Each party acknowledges that they have
received independent legal advice with regard to their respective rights, or
asserted rights, arising out of matters in controversy among the parties, and
also with regard to the advisability of making and executing this
Agreement.  The parties further acknowledge that they have not relied upon any
statements or representations other than as set forth herein and in the Purchase
Agreement, whether oral or written, made by any party. The release of claims
given in this section does not apply to obligations arising under this
Agreement.
 
6. Governing Law.  This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to that
body of laws pertaining to conflict of laws.
 
7. Entire Agreement.  This Agreement together with the New Note constitutes the
entire agreement and understanding of the parties with respect to the subject
matter hereof, and supersede all prior understandings and agreements, whether
oral or written, between the parties with respect to the subject matter hereof.
 
8. Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision(s) shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision(s) were so excluded and shall be enforceable in accordance with its
terms.
 
9. Successors and Assigns; Assignment.  This Agreement, and the rights and
obligations of the parties hereunder, is binding on and inures to the benefit of
the parties and their respective successors and assigns.
 
10. Counterparts; Facsimile Signatures.  This Agreement may be executed in any
number of counterparts (including facsimile), each of which when so executed and
delivered (including via facsimile) will be deemed an original, and all of which
together shall constitute one agreement.
 
11. Authority.  Each party represents and warrants that the person signing this
Agreement on behalf of such party has the authority to do so.
 
12. Captions.  The captions or headings of the paragraphs in this Agreement are
for convenience only and shall not control or affect the meaning or construction
of any of the terms or provisions of this Agreement.
 
13. Further Assurances.  From and after the date of this Agreement, upon the
request of AdEx, DEP or the Members, AdEx, DEP and the Members shall execute and
deliver such instruments, documents or other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
 
 
 
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14. Amendments. This Agreement may be amended only by a written agreement
executed by each of the parties hereto.  No amendment of or waiver of, or
modification of any obligation under this Agreement will be enforceable unless
set forth in a writing signed by the party against which enforcement is
sought.  Any amendment effected in accordance with this section will be binding
upon all parties hereto and each of their respective successors and assigns.  No
delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance.  No
waiver granted under this Agreement as to any one provision herein shall
constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.
 
15. Attorneys’ Fees.  In any proceeding arising out of this Agreement, the
prevailing party shall be entitled to recover all costs, including reasonable
attorneys’ fees, incurred in connection with such proceeding.
 
16. Notice. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or by overnight courier or sent by telegram or fax, or forty-eight (48) hours
after being deposited in the U.S. Mail, as certified or registered mail, with
postage prepaid, addressed to the party to be notified at the address or
facsimile number set forth on the signature page below, or at such other address
or facsimile number as such other party may designate by one of the indicated
means of notice herein to the other party, and if to DEP or to the Members, with
a copy to Giovanni Ruscitti, Esq., Berg Hill Greenleaf & Ruscitti LLP, 1712
Pearl Street, Boulder CO 80302, facsimile to (303) 402-1601, and if to the AdEx,
at the AdEx’s principal executive office, with a copy to Eric K. Ferraro, Esq.,
Bullivant Houser Bailey PC, 601 California Street, Suite 1800, San Francisco, CA
94108, facsimile to (415) 352-2701.

[Signatures on following page]

 
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IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the first date written above.
 
AdEx Media, Inc.
 
 
Digital Equity Partners, LLC
     
By:
 
By:
Name:
 
Name:
Title:
 
Title:  
     
Member
 
Member
           
Dennis Hefter
 
Giovanni Ruscitti
     
Member
 
Member
           
Robert S. Lazzeri
 
James Walker
     
Member
 
Member
           
Brian C. Frutchey
 
Michael Scott Leslie
     
Member
 
Member
           
Emmett M. Lien III
 
Cheri Belz
     
Member
 
Member
           
Robert Sensenig
 
Blair McNea
     

 
 
 

 
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EXHIBIT A
 
MEMBERSHIP INTEREST PURCHASE AGREEMENT
 
 

 

 

 

 

 
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EXHIBIT B
 
SENIOR SECURED PROMISSORY NOTE
 

 

 

 

 

 

 

 

 
 
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EXHIBIT C
 
SECURITY AGREEMENT
 

 

 

 

 

 

 

 
 
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EXHIBIT D-1
 
AMENDMENT
 

 
 
 
 
 
 

 
 

 
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EXHIBIT D-2
 
SECOND AMENDMENT
 

 

 

 

 

 

 

 

 

 

 
 
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EXHIBIT E
 
NEW NOTE
 

 

 

 

 

 

 

 

 
 
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EXHIBIT F
 
AMENDED AND RESTATED OPERATING AGREEMENT OF DIGITAL EQUITY PARTNERS, LLC
 

 

 

 

 

 

 
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EXHIBIT G
 
REVISED SCHEDULE C
 

 
SCHEDULE C

EARN OUT
 

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Forecasted Revenue during the Earn Out Period: $7,532,036

December 31, 2007 FY Audited Revenue: $4,786,810
 

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Earn Out to be paid if revenue during the Earn Out Period is $7,532,036 =
$350,000

Earn Out to be paid if revenue during the Earn Out Period is $5,791,697= $0

Earn Out to be paid if revenue during the Earn Out Period is between $5,792,698
and $7,532,035 shall be calculated pro-rata based on the above scale.

For example:                                

Earn Out to be paid if revenue during the Earn Out Period is $6,000,000=
$41,891.87

Earn Out to be paid if revenue during the Earn Out Period is $6,500,000=
$142,446.99

Earn Out to be paid if revenue during the Earn Out Period is $7,000,000=
$243,002.11

 
 
 
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EXHIBIT H
NEW SCHEDULE D
 

SCHEDULE D

HEFTER EARN OUT

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Forecasted Revenue during Hefter Earn Out Period: $7,532,036

December 31, 2007 FY Audited Revenue: $4,786,810
 

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Earn Out to be paid if revenue during Hefter Earn Out Period is $7,532,036 =
$150,000

Earn Out to be paid if revenue during Hefter Earn Out Period is $5,791,697 = $0

Earn Out to be paid if revenue during Hefter Earn Out Period is between
$5,792,698 and $7,532,035 shall be calculated pro-rata based on the above scale.

For example:                                

Earn Out to be paid if revenue during Hefter Earn Out Period is $6,000,000 =
$17,953.66

Earn Out to be paid if revenue during Hefter Earn Out Period is $6,500,000 =
$61,048.71

Earn Out to be paid if revenue during Hefter Earn Out Period is $7,000,000 =
$104,143.76