Document:

EX-10.2

 

Exhibit 10.2

JAG Media Holdings, Inc.

6865 S.W. 18th Street, Suite B13

Boca Raton, FL 33433

January 24, 2007

Cornell Capital Partners, LP

101 Hudson Street

Suite 3700

Jersey City, NJ 07302

Re: Convertible Debentures Nos. CCP-1 and CCP-2 in the original principal amounts of $1,900,000 and
$1,250,000 respectively, each dated May 24, 2006 and Convertible Debenture No. CCP-3 in the
original principal amount of $1,000,000, dated May 30, 2006 with JAG Media Holdings, Inc. (“JAG
Media”), as Obligor and Cornell Capital Partners, LP (“Cornell Capital”), as Holder thereunder
(collectively, the “Debentures”) and Warrant Nos. CCP-1, CCP-2, CCP-3, CCP-4 and CCP-5 for
2,000,000, 2,000,000, 2,000,000, 3,000,000 and 3,000,000 shares of Common Stock, respectively, each
dated May 24, 2006 and issued by JAG Media to Cornell Capital as Holder thereunder (collectively,
the “Warrants”).

Gentlemen:

The parties hereto agree as follows:

1. The term “Effective Date” shall mean the date the proposed merger between JAG Media and
Cryptometrics, Inc. (“Cryptometrics”) set forth in that certain merger agreement between such
parties dated December 27, 2005, as amended (the “Merger”) closes and becomes effective. This
agreement shall automatically terminate, and the parties hereto shall have no rights or obligations
hereunder in the event that the Effective Date has not occurred by the end of business on March 15,
2007, unless extended in writing by the parties hereto.

2. Upon the Effective Date, Cryptometrics (to be then f/k/a JAG Media Holdings, Inc.) (the
“Post-Merger Company”) shall automatically and without any further action succeed to and assume all
of the rights and obligations of the “Obligor” under the Debentures and the “Company” under the
Warrants, as well as all of JAG Media’s rights and obligations under the Securities Purchase
Agreement between Cornell Capital and JAG Media dated May 4, 2006, the Investor Registration Rights
Agreement dated May 4, 2006 between JAG Media and Cornell Capital, the Irrevocable Transfer Agent
Instructions and this letter agreement (collectively, the “Transaction Documents”).

3. Cryptometrics acknowledges that as of the date hereof, the principal balances of the Debentures
are as follows:

 

 

Cornell Capital Partners, LP

January 24, 2007

Page 2

	 	 	 	 	 
	Debenture No. CCP-1
	 	$	1,900,000	 
	Debenture No. CCP-2
	 	$	1,250,000	 
	Debenture No. CCP-3
	 	$	370,000	 

4. Cornell Capital represents and warrants that it is the owner and holder of the Debentures and
the Warrants.

5. On or prior to the Effective Date, Cryptometrics, Inc., JAG Media (and any applicable subsidiary
of JAG Media) and Cornell Capital shall enter into new security agreements, in the same form as the
Security Agreements (as defined below), pursuant to which such entity or entities shall grant to
Cornell Capital a security interest in and to all of the assets of Cryptometrics (and its
subsidiaries) (“Cryptometrics Security Agreements”) to secure all of the obligations under the
Debentures. The Cryptometrics Security Agreements shall automatically terminate and be of no
further force and effect immediately upon the first to occur of the following, at which time
Cryptometrics, JAG Media (and any of its applicable subsidiaries) may file any necessary UCC
filings to reflect such termination: (a) Cornell Capital’s conversion into Common Stock of 100% of
the entire principal balance of the Debentures or the repayment in full of all amounts owed under
the Debentures and no other amounts are owed to Cornell Capital; or (b) both (i) JAG Media
increasing the Conversion Shares Reservation to a number of shares equal to four (4) times the
number of shares that would be required to be issued assuming the full conversion of the Debentures
(not taking into account any caps or conversion limitations) at the closing price of the Common
Stock on the Trading Day immediately prior to the date such increased reserve is created
(“Increased Conversion Shares Reservation”) and (ii) if necessary to lawfully implement the
Increased Conversion Shares Reservation, JAG Media increasing its authorized shares of Common Stock
to a number sufficient to permit the implementation of the Increased Conversion Shares Reservation.

6. Upon execution of the Cryptometrics Security Agreement, the security agreements (the “Security
Agreements”) created by JAG Media and JAG Media LLC effective May 25, 2006 for the benefit of
Cornell Capital shall be terminated and thereafter null and void and JAG Media and JAG Media LLC
may file any necessary UCC filings to reflect such termination.

7. The following agreements shall become effective as of the Effective Date, provided that the
Cryptometrics Security Agreements have been duly executed:

     A. Section 3, subparagraph (c) (i) of each of the Debentures shall be deleted in its entirety
and a new subparagraph (c) (i) shall be substituted therefore, which shall read as follows:

     (c) Conversion Price and Adjustments to Conversion Price.

 

 

Cornell Capital Partners, LP

January 24, 2007

Page 3

     (i) The conversion price in effect on any Conversion Date shall be equal to
ninety-five percent (95%) of the lowest daily Volume Weighted Average Price of the
Common Stock as quoted by Bloomberg, LP during the thirty (30) trading days
immediately preceding the Conversion Date; provided, however, that
if a conversion is made under any of the Debentures within thirty (30) days
following the closing of the proposed merger between JAG Media and Cryptometrics,
Inc. the conversion price in effect on any such Conversion Date shall be equal to
ninety-five percent (95%) of the lowest daily Volume Weighted Average Price of the
Common Stock as quoted by Bloomberg, LP during the trading days commencing on the
first trading day after the closing date of the merger and ending on the trading
day immediately preceding such Conversion Date (the “Conversion Price”). The
Conversion Price may be adjusted pursuant to the other terms of this Debenture.
References in the Debentures to the terms “Fixed Conversion Price” or “Market
Conversion Price” shall hereafter be deemed references to the term “Conversion
Price” as defined in this subparagraph (c)(i).

     B. Warrant No. CCP-1 dated May 24, 2006 for 2,000,000 shares of common stock shall be
cancelled and surrendered by Cornell Capital to JAG Media.

     C. Warrant Nos. CCP-2 and CCP-3, both dated May 24, 2006 for 2,000,000 shares of Common Stock
shall be amended such that each such warrants shall be warrants exercisable for 3,000,000 Warrant
Shares.

     D. The definition of “Warrant Exercise Price” as set forth in Section 1 (b) (xiii) of each of
the Warrants shall be deleted in its entirety, and a new definition of “Warrant Exercise Price”
shall be substituted in each of the remaining four Warrants, which shall read as follows:

     (xiii) “Warrant Exercise Price” means 88% of the average of the Volume Weighted
Average Price of the Common Stock as quoted by Bloomberg, L.P. during the thirty
(30) trading days immediately prior to the “Exercise Restriction Date.”

     E. A new defined term entitled “Exercise Restriction Date” shall be added to Section 1 (b) of
the Warrants, each of which shall read as follows:

Warrant No. CCP-2

     (xv) “Exercise Restriction Date” means March 31, 2007, the first date upon which
this Warrant may be exercised.

Warrant No CCP-3 

 

 

Cornell Capital Partners, LP

January 24, 2007

Page 4

     (xv) “Exercise Restriction Date” means June 30, 2007, the first date upon which
this Warrant may be exercised.

Warrant No. CCP-4

     (xv) “Exercise Restriction Date” means September 31, 2007, the first date upon
which this Warrant may be exercised.

Warrant No. CCP-5

     (xv) “Exercise Restriction Date” means December 31, 2007, the first date upon
which this Warrant may be exercised.

     F. Notwithstanding anything to the contrary in the Warrants, the Warrants are hereby amended
so that each Warrant may be exercised by its respective holder of record on any Business Day
commencing on the Exercise Restriction Date for that Warrant and prior to 11:59 PM Eastern Time on
the Expiration Date. In no event shall any Warrant be exercisable prior to its Exercise Restriction
Date. Cornell Capital shall affix, and keep affixed, to all Debentures and Warrants a copy of this
agreement.

     G. The 54 million shares of Common Stock required to be reserved for the “Conversion Shares”
pursuant to paragraph 2 (a) of the Irrevocable Transfer Agent Instructions dated May 4, 2006
between JAG Media, Cornell Capital and Transfer Online, Inc. (“Irrevocable Transfer Agent
Instructions”) shall be reduced to 20 million shares of Common Stock (“Conversion Shares
Reservation”).

8. If the average closing price of the Post-Merger Company’s Common Stock during any thirty (30)
day period following the Effective Date is less than $0.50 per share the Post-Merger Company,
acting through Messrs. Robert Barra and Michael Vitale as executives and members of the Board of
Directors of the Post-Merger Company, shall cause the Convertible Shares Reservation to be
increased from 20 million shares of Common Stock to a number of shares equal to four (4) times the
number of shares that would be required to be issued assuming a full conversion of the Debentures
(not taking into account any caps or conversion limitations) at the closing price of the Common
Stock on the Trading Day immediately prior to the date such increased reserve is created
(“Increased Conversion Shares Reservation”). If the authorized shares of Common Stock of the
Post-Merger Company must be increased in order to permit such increase of the Conversion Shares
Reservation, Messrs. Barra and Vitale, as executives, members of the board of directors and
majority stockholders of the Post-Merger Company shall take all actions necessary in each of their
capacities to promptly increase the Post-Merger Company’s authorized shares of Common Stock to a
number sufficient to permit the implementation of the Increased Conversion Shares Reservation
immediately after such additional shares are authorized. Messrs. Barra and Vitale further agree to
promptly vote

 

 

Cornell Capital Partners, LP

January 24, 2007

Page 5

their shares in favor of any such increase in the authorized shares of Common Stock of the
Post-Merger Company.

9. Any and all Transaction Documents, as such term is defined in the Securities Purchase Agreement
dated as of May 24, 2006 by and between JAG Media and Cornell Capital, shall be deemed amended,
mutatis mutandis, in accordance with the foregoing.

10. Within thirty (30) days of the Effective Date, the Post-Merger Company shall make all necessary
filings with the U.S. Securities and Exchange Commission (whether a new registration statement, or
a post effective amendment, or otherwise) to register for resale the shares of common stock
underlying the Debentures and the Warrants and have such registration declared effective by May 15,
2007.

11. Nothing contained herein shall limit Cornell Capital’s ability to convert the Debentures in
accordance with their terms; provided, however, that in no event shall Cornell
Capital convert any portion of the Debentures or exercise any of the Warrants (in whole or in part)
prior to the Effective Date or the termination of this Agreement, which ever occurs first.
Notwithstanding anything to the contrary in this agreement, the above restrictions on Cornell
Capital’s ability to convert the Debentures or exercise the Warrants prior to the Effective Date or
the termination of this Agreement, which ever occurs first, shall become effective immediately upon
the execution of this agreement by the all parties.

12. 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.

13. All defined terms used in this agreement, which are not otherwise defined herein shall have the
meaning ascribed to them in the Debentures. Except as otherwise set forth in this agreement, the
Debentures and Warrants shall remain unchanged and in full force and effect.

[SIGNATURES APPEAR ON NEXT PAGE]

 

 

Cornell Capital Partners, LP

January 24, 2007

Page 6

If the foregoing accurately reflects your understanding of our agreements regarding the
modifications to be made with respect to the Debentures, Warrants and other related documents,
please indicate your agreement and acceptance by signing and dating in the appropriate space below
and returning a fully executed and dated copy of this agreement to the undersigned.

Sincerely yours,

JAG Media Holdings, Inc.

	 	 	 	 	 	 	 
	By:
	 	/s/ Thomas J. Mazzarisi 	 	 	 	 
	 

	 	 

Name: Thomas J. Mazzarisi
	 	 	 	 
	 

	 	Title: Chairman & CEO	 	 	 	 
	 

	 	Date: January 23, 2007	 	 	 	 
	 
	 	 	 	 	 	 
	AGREED AND ACCEPTED: 

Cornell Capital Partners, LP	 	 	 	The undersigned parties are signing
this agreement only with respect to
the obligations in Paragraph 5 above
	 
	 	 	 	 	 	 
	By: Yorkville Advisors, LLC	 	 	 	 
	Its: General Partner	 	 	 	 
	 
	 	 	 	 	 	/s/ Robert Barra 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Robert Barra
	 

	 	 	 	 	 	Date: January 24, 2007
	 
	 	 	 	 	 	 
	By:
	 	/s/ Mark Angelo 	 	 	 	 
	 

	 	 

Mark Angelo, Portfolio Manager
	 	 	 	 
	 

	 	Date: January 26, 2007	 	 	 	 
	 
	 	 	 	 	 	/s/ Michael Vitale 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Michael Vitale
	 

	 	 	 	 	 	Date: January 24, 2007
	 
	 	 	 	 	 	 
	Cryptometrics, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Robert Barra 	 	 	 	 
	 

	 	 

Name: Robert Barra
	 	 	 	 
	 

	 	Title: Co-CEO	 	 	 	 
	 

	 	Date: January 24, 2007EX-10.1

 

Exhibit 10.1

AMENDMENT NO. 1 TO AMENDED AND RESTATED CONSULTING

AGREEMENT

     This Amendment No. 1 to Amended and Restated Consulting Agreement (the “Amendment”) is made as
of January 30, 2007 (the “Effective Date”) by and among Electro-Optical Sciences, Inc., a Delaware
corporation (the “Company”), Gerald Wagner (“Wagner”) and Gerald Wagner Consulting LLC (the
“Consultant”).

RECITALS

     WHEREAS, the Company and the Consultant are parties to that certain Amended and Restated
Consulting Agreement dated as of April 1, 2006 (the “Existing Consulting Agreement”);

     WHEREAS, the Company is commencing the pivotal clinical trial for its MelaFind product on the
Effective Date (the “Pivotal Trial”);

     WHEREAS, Wagner has been serving as the Acting Chief Operating Officer of the Company; and

     WHEREAS, now that the Pivotal Trial is commencing the Company and the Consultant would like to
amend the Existing Consulting Agreement and Wagner would like to resign as the Acting Chief
Operating Officer of the Company.

     NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:

     1. Amendment of the Existing Consulting Agreement. The Existing Consulting Agreement
is hereby amended by deleting Sections 1-3 thereof in their entirety and replacing them with the
following:

     “1. Transition Services. (a) The Consultant will assist the Company in
transitioning the responsibilities of Gerald Wagner, as the Acting Chief Operating Officer
of the Company, and the responsibilities of the Consultant pursuant to this Agreement as in
effect prior to January 30, 2007 to the employees of the Company or other persons
designated by the Chief Executive Officer of the Company (the “Transition Services”).

     (b) Upon request by the Chief Executive Officer of the Company, the Consultant will
provide additional consulting services to the Company on a per diem basis on days that are
mutually agreed by the Consultant and the Company (the “Additional Services”).

     2. Consideration; Expenses. (a) As consideration for the Transition
Services, the Company will pay the Consultant: (i) a monthly fee of $2,500

1

 

payable on or about the first business day of each month during the Term (as defined
below) and (ii) in the event that the Transition Services requested by the Chief Executive
Officer of the Company exceed one day per month in any month during the Term, an additional
fee for such Transition Services equal to $2,500 per day.

     (b) As consideration for the Additional Services, the Company will pay the Consultant
$2,500 per day of Additional Services rendered, such payment to be made within thirty (30)
business days after such Additional Services are rendered.

     (c) Reasonable expenses of the Consultant incurred at the request of the Company
(including travel expenses incurred in connection with Company-related business) will be
reimbursed promptly by the Company, subject to customary verification, in accordance with
the Company’s standard expense reimbursement and travel policy.

     3. Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date of this Agreement and will end (a) at the option of the Consultant or the
Company, at any time by providing fifteen (15) days’ prior written notice to the other
party (during which fifteen (15) day period the Consultant shall continue to perform its
duties hereunder) or (b) immediately upon the mutual agreement of the Company and the
Consultant.”

     2. Acknowledgment Regarding Payments under the Existing Consulting Agreement. The
Consultant hereby acknowledges and agrees that all amounts owed to the Consultant pursuant to the
Existing Consulting Agreement have been paid in full.

     3. Resignation as Acting Chief Operating Officer. Wagner hereby resigns as Acting
Chief Operating Officer of the Company, effective as of the Effective Date.

     4. Vesting of Stock Option. The Company and Wagner hereby acknowledge that the
non-qualified stock option granted to Wagner to purchase up to 50,000 shares of common stock, par
value $.001 per share, of the Company pursuant to a Non-Qualified Stock Option Agreement between
the Company and Wagner dated as of March 24, 2006 vested in full effective as of the Effective Date
as a result of the commencement of the Pivotal Trial.

     5. Ratification and Confirmation. Except as expressly amended hereby, the terms and
provisions of the Existing Consulting Agreement shall remain in full force and effect and are
hereby ratified and confirmed.

2

 

     IN WITNESS WHEREOF, this Amendment may be executed in counterparts, each of which shall
constitute an original and all of which together shall constitute one instrument, effective as of
the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	Electro-Optical Sciences, Inc.	 	 	 	Gerald Wagner Consulting LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Joseph V. Gulfo, M.D. M.B.A.	 	 	 	By:	 	/s/ Gerald Wagner	 	 
	 

	 	

	 	 
	 	 	 	 

	 	 
	 	 	Joseph V. Gulfo, M.D. M.B.A.	 	 	 	         Gerald Wagner	 	 
	 

	 	President	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 		 	 /s/ Gerald Wagner	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Gerald Wagner	 	 
	 	 	 	 	 	 	(solely with respect to Sections
3 and 4 hereof)	 	 

3

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