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Exhibit 10.6.1
MODIFICATION AGREEMENT
MODIFICATION AGREEMENT, dated as of January 1, 2000 (this "Modification
Agreement"), between BOARDRUSH MEDIA, LLC, a Vermont limited liability company
having an office at 972 Putney Road, Suite 299, Brattleboro, Vermont 05301
("Boardrush"), and JFAX.COM, INC., a Delaware corporation having an office at
6922 Hollywood Boulevard, Suite 900, Los Angeles, California 90028 ("JFAX").
WITNESSETH:
WHEREAS, Boardush and JFAX are parties to, or payees under, the following
documents and agreements:
Pledge Agreement, dated as of March 17, 1997 (the "Pledge Agreement"),
among Boardrush, JFAX, and Sullivan & Cromwell, as collateral agent;
Note Agreement, dated as of March 17, 1997 (as amended by a letter
agreement, dated as of June 1, 1999, the "Note Agreement"), between
Boardrush and JFAX;
$2,250,000 Promissory Note, dated March 17, 1997 (as restated on February
26, 1999, the "Note"), issued by Boardrush payable to JFAX;
Consulting Agreement, dated March 17, 1997 (the "Consulting Agreement"),
among Boardrush, JFAX, Jens Muller, and John F. Rieley; and
Registration Rights Agreement, dated as of March 17, 1997 (the
"Registration Rights Agreement"), among JFAX, Boardrush, Orchard/JFAX
Investors, Jens Muller, John F. Rieley, Nehemia Zucker, and Anand
Narasimhan; and
WHEREAS, the parties desire to modify certain terms of the Note Agreement,
the Note, and the Consulting Agreement as more fully set forth below.
NOW, THEREOF, for full and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Boardrush and JFAX hereby agree as
follows:
1. The Extended Term (as defined in the Consulting Agreement) is hereby
reduced such that the Extended Term (and the term of the Consulting Agreement)
shall expire on December 31, 2002.
2. Section 5.3 of the Note Agreement is hereby deleted in its entirety
and replaced with the following:
"5.3. (a) Payment Through Consulting Services. In addition to and not
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in limitation of Section 5.2 above, during the period beginning on March 17,
1999 and ending on December 31, 2002, the Issuer shall effect payment of the
Notes through an extension, for an additional period of approximately three and
one-half years commencing on March 17, 1999 and ending on December 31, 2002 (the
"Extended
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Term"), of the Consulting Agreement entered into between the Issuer and the
Investor simultaneously with the Closing (the "Consulting Agreement"). Such
payment of the Notes through services rendered pursuant to such Consulting
Agreement shall be deemed to include both principal and interest, with
reductions in principal to be calculated pro rata according to the time served
over a five (5)-year period (i.e., $37,500 per calendar month) commencing March
17, 1999, so that the Notes shall be deemed to have been prepaid, in part, in
the total principal amount of $1,704,435.48 during the Extended Term; provided,
however, that the parties agree that the principal reduction for the period
January 1, 2000 through December 31, 2002 (in the amount of $1,350,000) shall
not occur on a monthly basis and shall not be deemed earned until December 31,
2002 at the completion of the Extended Term, on which date such $1,350,000
amount shall be deemed earned in full. Any and all interest on the Notes
accruing during the Extended Term shall be deemed paid in arrears on the last
Business Day of each month occurring during the Extended Term. Any termination
during the Extended Term of Consulting Agreement (with the single exception of
termination thereof for Cause as defined in the Consulting Agreement), whether
as a result of death, disability or other reason, shall have the effect of
accelerating the performance of such extended Consulting Agreement to the date
of termination, and the Notes shall be deemed to have been prepaid in part in
accordance with the second sentence of this Section 5.3(a) at such time.
However, in the case of any termination during the Extended Term of the
Consulting Agreement for Cause as defined in the Consulting Agreement, the
deemed prepayment of the Notes pursuant to this Section 5.3 shall be a partial
prepayment of principal through the date of such termination only (with the
partial prepayment equaling $37,500 per calendar month, commencing March 17,
1999 and ending on the date of such termination). The parties further agree that
any cash payments made by the Company to the Issuer under the Consulting
Agreement during the Extended Term shall reduce dollar-for-dollar the deemed
principal reduction discussed in the second sentence of this Section 5.3(a).
(b) Payment in Common Stock. In lieu of the Issuer making payments of
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principal and/or interest due on the Notes in cash, the Issuer may, in
connection with any such payment, elect to make such payment by the delivering
to the Holder a written notice of repayment with Common Stock (a "Common Stock
Repayment Notice") together with a certificate or certificates representing a
number of shares of Common Stock equal to the product of (i) the aggregate
amount of principal and/or interest which the Issuer is electing to pay in
shares of Common Stock (which amount shall be set forth in the Common Stock
Repayment Notice) multiplied by (ii) a fraction, the numerator of which is one
(1), and the denominator of which is the Fair Market Value (as hereinafter
defined) per share of the Common Stock at the time of the delivery of the
Repayment Common Stock Notice to the Holder. As used herein, "Fair Market
Value" shall mean (x) if the Common Stock is listed on a national securities
exchange registered under the Securities Exchange Act of 1934, a price equal to
the closing sales price for the Common Stock on such exchange for the trading
day immediately preceding the time of the delivery of the Repayment Common Stock
Notice to the Holder and (y) if not so listed, and the Common Stock is quoted on
NASDAQ, a price equal to the closing sales price for the Common Stock quoted on
such system for the trading day immediately preceding the time of the delivery
of the Repayment Common Stock Notice to the Holder.
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(c) If at any time prior to December 31, 2002, the Issuer makes a payment
in cash or Common Stock equal to $760,618, then (i) the provisions of Article VI
hereof (regarding mandatory redemption of the Note in the event that the Issuer
or its affiliates sells at least $6 million in value of Common Stock) shall
thereafter be void and of no further force or effect and (ii) Pledge Agreement
shall be of no further force or effect and the shares of Common Stock pledged
thereunder shall be released from the lien thereof. Thereafter, absent a
termination of the Consulting Agreement for Cause, the outstanding principal
amount of, and interest on, the Notes will be paid off through payment of fees
under the Consulting Agreement.
3. The parties agree that the Note is hereby amended and restated in its
entirety in the form of an Amended and Restated Promissory Note delivered by
Boardrush to JFAX concurrently with the execution of this Modification
Agreement.
4. Except as expressly modified herein, the Pledge Agreement, the Note
Agreement, the Consulting Agreement and the Registration Rights Agreement remain
unmodified and in full force and effect. The parties hereto expressly ratify
and reaffirm the terms of these agreements as modified by this Modification
Agreement.
5. This Modification Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same document.
IN WITNESS WHEREOF, the parties have caused their respective authorized
representatives to sign this Modification Agreement as of the date first written
above and each of the undersigned hereby represents and warrants that (s)he is
authorized to execute this Modification Agreement on behalf of the respective
party to this Modification Agreement and that this Modification Agreement when
executed by such party shall become a valid and binding obligation enforceable
by and against such party in accordance with its terms.
BOARDRUSH MEDIA, LLC
By: /s/ Jens Muller
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Jens Muller
Manager
JFAX.COM, INC.
By: /s/ Richard S. Ressler
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Richard S. Ressler
Chairman
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