Exhibit 10.3

 

LOGICMARK, LLC

Logicmark Investment Partners, LLC

1359 Barclay Boulevard

Buffalo Grove, Illinois 60089

 

November 29, 2016

 

VIA EMAIL

 

Nxt-ID, Inc.

285 North Drive, Suite D

Melbourne, FL 32934

Email: gino@nxt-id.com

Attn: Gino Pereira

 

Re:$2,500,000 loan (the “Loan”) from Logicmark Investment Partners, LLC (the
“Lender”) to Nxt-ID, Inc. (“Borrower”)

 

Dear Gino:

 

Reference is hereby made to the above-referenced Loan as evidenced by that
certain Secured Subordinated Promissory Note issued by Borrower to the order of
Lender on July 25, 2016 in the original principal amount of $2,500,000 (the
“Original Note”) and the forbearance letter agreement dated September 23, 2016
between Lender and Borrower (the “Original Forbearance Agreement”). All
capitalized terms not otherwise defined herein shall have the meanings described
to them in the Original Forbearance Agreement.

 

Concurrently herewith, Lender and Borrower are entering into an Assignment and
Assumption Agreement with certain investors (“Note Purchasers”) pursuant to
which Note Purchasers are purchasing Lender’s rights to $1,500,000 of principal
(but excluding any accrued and unpaid interest thereon) under the Original Note
for the aggregate purchase price of $1,500,000 (the “Note Assignment”). Lender
retained its rights with respect to the remaining $1,000,000 of principal under
the Original Note, as well as the accrued interest and unpaid interest on the
entire original principal amount thereof (the replacement note for such retained
portion being the “Retained Note”). Borrower was unable to pay its obligations
under the Retained Note in accordance with the Original Forbearance Agreement
(the “Additional Default”), which constitutes a Forbearance Default under the
Original Forbearance Agreement and permits Lender to take action with respect to
the Potential Default under the Retained Note. Borrower has requested that
Lender (a) waive its right to have interest accrue on the Loan at the Default
Rate as result from the Potential Default or the Additional Default, (b) forbear
from exercising Lender’s rights in respect of the Potential Default or the
Additional Default during the Extended Forbearance Period (as hereinafter
defined), and (c) further extend the payment terms of the Retained Note, and
Lender is willing to waive such rights and provide such extension, for a limited
period of time, all on the terms and provisions set forth in this letter.

 

 

 

 

NXT-ID, INC.

November 29, 2016

Page 2

 

Subject to the terms and conditions of this letter, including, without
limitation, Borrower’s satisfaction of the obligations undertaken hereunder, and
solely during the Extended Forbearance Period, Lender agrees not to exercise any
of its rights and remedies in respect of the Potential Default or the Additional
Default, including the right to collect interest in respect of the Loan at the
Default Rate (but Lender shall not be deemed to have waived its other rights in
respect of the occurrence of any other Event of Default or Forbearance Default).
For purposes of this letter, (a) “Extended Forbearance Period” means the period
beginning on the date hereof and ending on the Extended Termination Date, (b)
“Extended Termination Date” means the earlier to occur of (i) April 15, 2017,
and (ii) the date upon which a Forbearance Default occurs, and (c) “Forbearance
Default” means (i) the occurrence of any Event of Default (other than the
Potential Default) or any Forbearance Default (other than the Additional
Default), (ii) the failure of Borrower to comply with any term, condition or
covenant set forth in this letter, or (iii) an event or circumstance with
respect to which any representation or warranty made by Borrower under or in
connection with this letter shall prove to be untrue.

 

The obligation of Lender to agree to forbear from taking action in respect of
the Potential Default or the Additional Default during the Extended Forbearance
Period is subject to the Borrower’s satisfaction of all of the following
conditions:

 

1.Note Assignment and Retained Note Payments.

 

a.On the date hereof, Note Purchasers shall pay Lender an aggregate amount of
$1,500,000 in immediately available funds in accordance with the Note
Assignment.

 

b.From the funds received by Lender in accordance with Section 1(a), Lender will
fund into the Escrow Account the following amount (the “Funded Escrow Amount”)
at such time as Borrower has fully funded the Escrow Account in accordance with
Section 1(c):

 

i.$350,000 (i.e., the amount of prior Note payments made by Borrower); minus
ii.The sum of (A) the amount of accrued and unpaid interest under the Retained
Note through the date hereof (i.e., accrued and unpaid interest on $2,500,000 of
original principal), plus (B) the amount of interest that will accrue under the
Retained Note from the date hereof until April 15, 2017 (i.e., that will accrue
on $1,000,000 of retained principal).

 

c.On or before the Forbearance Termination Date, Borrower shall fund into the
Escrow Account an amount equal to (i) $1,000,000, minus (ii) the Funded Escrow
Amount.

 

 

 

 

NXT-ID, INC.

November 29, 2016

Page 3

 

2.Note Purchaser Notes.

 

a.On the date hereof, Borrower shall have delivered to Lender the Intercreditor
Agreement from Note Purchaser in the form attached as Exhibit A hereto.

 

b.Borrower agrees not to amend or otherwise modify the terms of the portion of
the Original Note acquired by the Note Purchaser, other than for the amendment
and restatement effected on the date hereof pursuant to the Exchange Agreement
between Note Purchasers and Borrower, without the prior written consent of
Lender.

 

3.Representations and Warranties. In order to induce Lender to enter into this
letter, Borrower hereby represents and warrants to Lender that:

 

a.no Event of Default (other than the Potential Default) or Forbearance Default
(other than the Additional Default) has occurred, is anticipated to occur or is
continuing;     b.Borrower has used, and shall continue to use, best efforts to
expeditiously raise equity capital sufficient to meet its obligations under, and
in accordance with, the Original Note, the Retained Note, the Purchase Agreement
and this letter;     c.Borrower has the power and authority to execute, deliver
and perform this letter and has taken all necessary action to authorize its
execution, delivery and performance of this letter;     d.this letter has been
duly executed and delivered by Borrower and constitutes the legal, valid and
binding obligation of Borrower, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and by general principles of equity; and     e.neither the
execution and delivery of this letter, nor the consummation of the transactions
contemplated hereby, will conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement to which Borrower is a party.

 

4.Indemnification. Borrower agrees to indemnify and hold harmless Sellers from
and against the entirety of any Adverse Consequences suffered by Sellers as a
result of Borrower’s breach of any of its representations, warranty or covenant
in this letter.

 

Except as expressly provided herein, nothing in this letter shall be construed
as a waiver of or acquiescence to any Event of Default or Forbearance Default
that may now or hereafter exist in connection the Retained Note, the
subordinated security agreement or any other agreements, documents and
instruments executed or delivered in connection with the Loan (collectively, the
“Loan Documents”). Except as expressly provided herein, the execution and
delivery of this letter shall not (a) constitute an extension, modification, or
waiver of any term or aspect of any of the Loan Documents; (b) extend the terms
of the Loan or the due date of any of the obligations thereunder; (c) give rise
to any obligation on the part of Lender to extend, modify or waive any term or
condition of any of the Loan Documents; (d) give rise to any defenses or
counterclaims to the right of Lender to compel payment of the obligations, or to
otherwise enforce its rights and remedies, under the Loan Documents; or (e)
serve to effect a novation of the Loan obligations. Except as expressly limited
herein, Lender hereby expressly reserves all of its rights and remedies under
the Loan Documents and under applicable law and, from and after the Extended
Termination Date, Lender shall be entitled to enforce the Loan Documents
according to the terms thereof.

 

 

 

 

NXT-ID, INC.

November 29, 2016

Page 4

 

Borrower, hereby (a) ratifies and reaffirms all of its payment and performance
obligations, contingent or otherwise, under each of the Loan Documents (after
giving effect hereto) and (b) to the extent Borrower granted liens on or
security interests in any of its property pursuant to any such Loan Document as
security for its obligations under or with respect to the Loan Documents,
ratifies and reaffirms such grant of security interests and liens and confirms
and agrees that such security interests and liens hereafter secure all of the
Loan obligations as amended hereby. Borrower hereby consents to this letter and
acknowledges that each of the Loan Documents remains in full force and effect
and is hereby ratified and reaffirmed.

 

In consideration of the agreements of Lender set forth herein, Borrower hereby
releases, remises, acquits and forever discharges Lender, and each of its
respective employees, agents, representatives, consultants, attorneys, officers,
managers, members, directors, partners, fiduciaries, predecessors, successors
and assigns, subsidiary corporations, parent corporations and related corporate
divisions (collectively, the “Released Parties”), from any and all actions,
causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character, known
or unknown, direct or indirect, at law or in equity, of whatever nature or kind,
whether heretofore or hereafter arising, for or because of any matter of things
done, omitted or suffered to be done by any of the Released Parties prior to and
including the date of execution hereof, and in any way directly or indirectly
arising out of any or in any way connected to this letter, the Retained Note or
any other Loan Agreements (collectively, the “Released Matters”). Borrower
hereby acknowledges that the foregoing releases in this letter are intended to
be in full satisfaction of all or any alleged injuries or damages arising in
connection with the Released Matters. Borrower hereby represents and warrants to
Lender that it has not purported to transfer, assign or otherwise convey any
right, title or interest in any Released Matter to any other Person and that the
foregoing constitutes a full and complete release of all Released Matters.

 

Borrower, on behalf of itself and its affiliates and each of its and their
respective successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably, covenants and agrees with and in
favor of each of the Released Parties that it will not sue (at law, in equity,
in any regulatory proceeding or otherwise) any Released Party on the basis of
any Released Matters released, remised and discharged by such Person pursuant to
this letter. If Borrower or any of its affiliates, successors, assigns or other
legal representatives violates the foregoing covenant, Borrower shall be
obligated to pay, in addition to such other damages as any Released Party may
sustain as a result of such violation, all attorneys’ fees and costs incurred by
any Released Party as a result of such violation.

 

 

 

 

NXT-ID, INC.

November 29, 2016

Page 5

 

Borrower hereby agrees to execute and deliver or cause to be executed and
delivered, from time to time, as and when requested by Lender, all such
documents, instruments and agreements and to take or cause to be taken such
further or other action as Lender may reasonably deem necessary or desirable in
order to carry out the intent and purposes of this letter, the Retained Note and
the other Loan Documents.

 

This letter may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed signature page to this letter by
facsimile transmission or otherwise transmitted or communicated by email shall
be as effective as delivery of a manually executed counterpart of this letter.

 

Very truly yours,             LOGICMARK INVESTMENT PARTNERS, LLC             By:
/s/ Sarah Wuellner     Name: Sarah Wuellner     Title: Manager            
Agreed and accepted:             NXT-ID, INC.             By: /s/ Gino Pereira  
  Name: Gino Pereira     Title: Chief Executive Officer             cc: David E.
Danovitch, Esq. (ded@robinsonbrog.com)