Document:

f8kex10vi_xfactor.htm

Exhibit 10.6

 

SECOND MODIFICATION OF CONVERTIBLE LOAN AGREEMENT

 

This Second Modification of Convertible Loan Agreement (this "Second Modification") made and executed as of September 14, 2011, by and between:

 

X-FACTOR COMMUNICATIONS, LLC located at 3 Empire Boulevard, South Hackensack, New Jersey 07606 ("Borrower") and

 

NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic constituting an instrumentality of the State of New Jersey (the "Authority").

 

Background

 

The Authority and the Borrower entered into a Convertible Loan Agreement dated July 31, 2009 (the "Loan Agreement") pursuant to which the Authority loaned Borrower the sum of $500,000 (the "Loan"). The Loan is evidenced by a Secured Convertible Promissory Note of the same date (the "Note"). Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Loan Agreement.

 

WHEREAS, in December 2010, the Borrower requested and the Authority agreed to grant a 6-month interest-only payment period on the Note commencing on December 1, 2010 and ending on May 1, 2011 evidence by a First Modification of Convertible Loan Agreement dated January 19, 2011 ("First Modification").

 

WHEREAS, in order to provide continued payment relief to the Borrower and to allow the Borrower to conserve its cash until bridge financing and receivables from the Cisco contract are collected, the Borrower requested a second 6-month interest only payment period on the Note.

 

WHEREAS, at a meeting on August 16, 2011, the members of the Authority approved the second 6-month interest only payment period on the Note retroactively commencing on June 1, 2011 and ending on November 1, 2011. In exchange for such consent, the Authority filed a UCC Financing Statement and United States Patent and Trademark Office liens on intellectual property of Maker.

 

WHEREAS, the Borrower does not have more than six months of expendable cash available to sustain operations and make payments on the Loan as modified.

 

NOW, THEREFORE, in consideration of the above, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority and the Borrower hereby agree to modify the original Loan Agreement as follows:

 

1.Borrower reaffirms and ratifies, as of the date hereof, all covenants, promises and representations made by it in the original Loan Agreement, except as such may be modified by this Second Modification.

 

  

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2. Borrower represents that there exists no default under the original Loan Agreement and other Transaction Documents except those defaults of which the Authority is aware. Borrower acknowledges that nothing contained here shall be deemed or construed to waive any default.

 

3. The outstanding principal amount of the Note as of June 1, 2011 was $468,749.99 ("Outstanding Principal Amount").

 

4. The Outstanding Principal Amount of the Note shall be repaid as set forth in a Second Amendment to Secured Convertible Promissory Note dated the date hereof.

 

5. Paragraph 3 (a) "Interest" of the Loan Agreement is deleted in its entirety and the following new language is substituted in its place:

 

"a) Interest. Borrower shall pay interest on the Note at a fixed rate equal to the rate specified on the cover page hereof. Interest payments will be calculated on an actual days elapsed over a 360 day year and will be payable monthly in arrears. Interest-only payments for the first twelve (12) months, followed by two (2) months of monthly payments of principal and interest, followed by interest-only payments for twelve (12) months. Thereafter, the Outstanding Principal Amount is due and payable in thirty-three (33) monthly installments of principal plus interest. On the Maturity Date specified on the cover page, the entire outstanding principal balance of the Note and all accrued and unpaid interest thereon will be immediately due and payable."

 

6. The Borrower shall execute and deliver to the Authority contemporaneously with the execution of this Second Modification, the Second Amendment to Secured Convertible Promissory Note.

 

7. Borrower agrees and acknowledges that nothing contained herein shall be deemed or construed to discharge or invalidate the existing collateral held by the Authority to secure the Note and said collateral shall continue to secure the Loan.

 

8. Except as otherwise expressly modified by this Second Modification, the Loan Agreement, the Note, the Second Amendment to Secured Convertible Promissory Note and other Transaction Documents shall be deemed to be incorporated herein as if set forth at length and shall remain in full force and effect, each enforceable in accordance with their terms.

 

9. All references to the term "Loan Agreement" and "Transaction Documents" in the original Loan Agreement and the other Transaction Documents shall be deemed to refer to the original Loan Agreement, as amended by this Second Modification.

 

10. This Second Modification may be executed in multiple counterparts, each of which, when so executed, shall be deemed an original, and all of which shall together constitute one and the same document, and shall be binding on the signatories.

 

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, the Borrower and the Authority have caused this Second Modification of Convertible Loan Agreement to be duly executed as of the date first above written.

 

	WITNESS:	
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY

	 
	 	 	 	 
	

	
By: 

	 	 
	 	 	 	 
	WITNESS:	X-FACTOR COMMUNICATIONS, LLC	 
	 	 	 	 
	 	By:	 	 
	 Kr\ d-. füct feo,,t/	 	 Charles SaraIj1 o President and CEO	 

 

 

 3f8kex10vii_xfactor.htm

Exhibit 10.7

 

PATENT, TRADEMARK

AND COPYRIGHT SECURITY AGREEMENT

 

THIS PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT (together with all amendments, restatements, supplements and modifications, if any, from time to time hereto, this "Agreement"), dated as of July 31, 2009 is made by X-FACTOR COMMUNICATIONS, LLC, having an address at 3 Empire Blvd., South Hackensack, New Jersey, 07606, a New York limited liability company ("Grantor"), in favor of NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY, having an address at 36 West State Street, PO Box 990, Trenton, New Jersey 08625-0990 ("Lender").

 

INTRODUCTION

 

Pursuant to that certain Convertible Loan Agreement dated as of the date hereof by and among Grantor and Lender (including all annexes, exhibits and schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the "Agreement"), the Lender has, subject to certain terms and conditions, agreed to make certain loans (the "Loans") to Grantor. To induce Lender enter into the Agreement and other Transaction Documents (as defined in the Agreement) and to induce Lender to make the Loans as provided for in the Agreement, Grantor has agreed to grant a continuing security interest in the Collateral to secure the Obligations pursuant to the terms of the Security Agreement of this date between Grantor and Lender (including all annexes, exhibits and schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the "Security Agreement") and certain other Transaction Documents, including, without limitation, this Agreement. The parties now desire to grant to Lender a continuing security interest in the Intellectual Property Collateral (as defined below) owned by Grantor to secure the Obligations. This Introduction shall be construed as part of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor and Lender hereby agree as follows:

 

1.            Definitions. Unless otherwise defined herein, capitalized terms or matters of construction defined or established in the Security Agreement shall be applied herein as defined or established therein. All other undefined terms contained in this Agreement, unless the context indicates otherwise, shall have the meanings provided for by the UCC to the extent the same are used or defined therein.

 

2.            Grant of Security Interest in Intellectual Property Collateral. To secure the prompt and complete payment, performance and observance of all of the Obligations, Grantor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to Lender a Lien upon all its right, title and interest in, to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of, Grantor (including under any trade names, styles or divisions of Grantor), and regardless of where located (collectively, the "Intellectual Property Collateral"):

 

  

  

  

 

(a) all of Grantor's Patents and Patent Licenses to which it is a party, including those referred to in Part A to Schedule I hereto;

 

(b) all of Grantor's Trademarks, including those referred to in Part B to Schedule I hereto;

 

(c) all of Grantor's Copyrights and Copyright Licenses to which it is a party, including those referred to in Part C to Schedule I hereto;

 

(d) all registrations for any of the foregoing, and all reissues, continuations or extensions of the foregoing, together with all rights to register and record all of the foregoing;

 

(e) all goodwill, trade secrets, proprietary or confidential information, technical information, procedures, formulae, quality control standards, designs, operating and training manuals, customer lists, and other General Intangibles with respect to the foregoing; and

 

(f) all Proceeds of the foregoing, including (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to any Person (as defined in the Security Agreement) from time to time with respect to any of the foregoing, (ii) any and all payments (in any form whatsoever) made or due and payable to any Person from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing by any governmental authority (or any Person acting under color of governmental authority), (iii) any claim of any Person against third parties for (A) past, present or future infringement of any Patent or Patent License, (B) past, present or future infringement of any Copyright or Copyright License, (C) past, present or future infringement or dilution of any Trademark, or (D) injury to the goodwill associated with any Trademark, (iv) any recoveries by any Person against third parties with respect to any litigation or dispute concerning any of the foregoing, and (v) any and all other amounts from time to time paid or payable under or in connection with any of the foregoing, upon disposition or otherwise.

 

3.            Security Agreement. The Lien granted pursuant to this Agreement is granted in conjunction with the Liens granted to Lender pursuant to the Security Agreement. Grantor hereby acknowledges and affirms that the rights and remedies of Lender with respect to the Liens granted under this Agreement are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.

 

4.            Remedies Upon Default. (a) Anything herein contained to the contrary notwithstanding, if and while Grantor shall be in default hereunder or an Event of Default exists under the Security Agreement, Grantor hereby covenants and agrees that the Lender, as the holder of a security interest under the UCC, may take such action permitted under the Security Agreement or permitted by law, in its absolute discretion, to foreclose upon the Intellectual Property Collateral covered hereby.

 

  

  

  

 

5.   Acknowledgment. Grantor expressly acknowledges that, upon an event of default under the Transaction Documents, this Agreement shall be recorded with the United States Patent and Trademark Office.

 

IN WITNESS WHEREOF, the parties hereto have executed this Patent, Trademark and Copyright Security Agreement as of the date first written above.

 

	 	Grantor	 
	 	 	 
	 	
X-FACTOR COMMUNICATIONS, LLC, 

a New York limited liability company

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	Name: Charles Sar ino	 
	 	Title: President & EO	 
	 	 	 	 
	 	Lender	 
	 	 	 
	 	
NEW JERSEY ECONOMIC 

DEVELOPMENT AUTHORITY

	 
	 	 	 	 
	 	By: 	 	 
	 	Name: Teri Dunlop	 
	 	
Title: Director-Closing Services

	 

 

  

  

  

 

ACKNOWLEDGMENT

 

STATE OF NEW JERSEY : 

 

COUNTY OF ge-OE 41 7'.

 

BE IT REMEMBERED, that on this 31st day of          , 2I109, before me, the subscriber, an Attorney-at-Law of the State of New Jersey, personally appeared CHARLES SARACINO of X-FACTOR COMMUNICATIONS, LLC , a limited liability company, who, I am satisfied is the person who executed the foregoing Instrument on behalf of said limited liability company, and who thereupon acknowledged that he signed and delivered said Instrument as member, and that said Instrument is the voluntary act and deed of said limited liability company.

 

	
 

	 	 
	 	
M E„DEAL.

	 
	 	
i47-TOgNEY 14T- MIA)

	 

  

  

  

 

ACKNOWLEDGMENT

 

STATE OF NEW JERSEY :

ss.:

COUNTY OF MERCER

 

BE IT REMEMBERED, that on this 31st day of July, 2009, before me, the subscriber, personally appeared TERI DUNLOP, who, being by me duly sworn, did depose and make proof to my satisfaction that she is the DIRECTOR — CLOSING SERVICES of the NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY, the authority mentioned in the within Instrument; that the execution, as well as the making of this Instrument, has been duly authorized by a proper resolution of the Board of Members of said authority; and said Instrument was signed and delivered by said officer as and for the voluntary act and deed of said authority.

 

                      _______________________________

 

  

  

  

 

SCHEDULE I

 

to

 

PATENT,

 

TRADEMARK AND COPYRIGHT SECURITY AGREEMENT

 

PART A: PATENTS

 

Application No. 12/326,034 filed on December 1, 2008 for DYNAMIC DIGITAL SIGNMAGE,

CUSTOMER CONTENT CONTROL PORTAL & MANAGEMENT SYSTEM (Provisional

 

Application Number 60/991,648

 

PART B: TRADEMARKS/SERVICE MARK

 

DSCP (serial number 77467712)

 

DSCP://DIGITAL SIGNAGE CONTROL PORTAL & DESIGN (serial number 77468035)

 

PART C: COPYRIGHTS

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