Exhibit 10.1
WAIVER, CONSENT AND VOTING
AGREEMENT
THIS WAIVER, CONSENT AND VOTING
AGREEMENT (the “ Agreement ”) is made and
entered into on this 5th day of January, 2009 by and between Barron
Partners LP, a Delaware limited partnership (“ Barron
”), and Banks.com, Inc., a Florida corporation (the “
Company ”).
RECITALS
WHEREAS , on September 26, 2005, Barron entered
into a Stock Purchase Agreement with the Company (the “
Stock Purchase Agreement ”) pursuant to which Barron
purchased from the Company 250,000,000 shares (the “
Shares ”) of the Company’s common stock, par
value $0.001 per share (“ Common Stock
”);
WHEREAS , Section 6.12 of the Stock Purchase
Agreement provides that, so long as Barron holds at least 20% of
the shares of the Company’s common stock purchased pursuant
to the Stock Purchase Agreement, Barron will have the right to
participate in any offer and sale by the Company of shares of
Preferred Stock or debt that is convertible into shares of Common
Stock or any capital stock that is otherwise senior or superior to
the Common Stock (“ Subsequent Financing ”) on a
pro rata basis at one hundred percent (100%) of the offering
price in connection with such Subsequent Financing;
WHEREAS , the Company intends to sell to Daniel
O’Donnell, the Company’s President and Chief Executive
Officer, and certain of his affiliates, shares of a new series of
preferred stock of the Company to be designated as the
Company’s “Series C Preferred Stock,” par value
$.001 per share (the “ Series C Preferred Stock
”);
WHEREAS , Barron has agreed to expressly consent to the
offer and sale by the Company of the Series C Preferred Stock to
Mr. O’Donnell and certain of his affiliates and to waive
its right under Section 6.12 of the Stock Purchase Agreement
to participate in the offer and sale by the Company of the Series C
Preferred Stock; and
WHEREAS , in order to facilitate the designation and
issuance of the Series C Preferred Stock to
Mr. O’Donnell and certain of his affiliates as described
herein, Barron has also agreed to vote all of the Shares as well as
any other shares of capital stock of the Company which Barron has
acquired or may acquire on or after the date of this Agreement (the
“ Voting Shares ”) in favor of: (a) the
adoption and approval of Articles of Amendment to the
Company’s Amended and Restated Articles of Incorporation
setting forth the rights and preferences of the Series C Preferred
Stock and (b) the approval of the issuance of the shares of
Series C Preferred Stock, and to grant a proxy with respect to the
Voting Shares in favor of the Company’s Board of
Directors.
NOW, THEREFORE
, in consideration of the mutual
covenants and agreements of the parties contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto covenant and agree
as follows:
1. Incorporation of Recitals
. The foregoing recitals are incorporated herein by reference as if
fully set forth herein; provided that the capitalized term
“Shares” shall refer to the
250,000,000 shares of the Company’s Common
Stock purchased by Barron pursuant to the Stock Purchase Agreement
adjusted for any sale of such shares, stock dividend, stock split,
stock combination or other similar transaction prior to the date
hereof.
2. Consent and Waiver .
Barron hereby consents to the offer and sale by the Company to
Mr. O’Donnell and certain of his affiliates of Series C
Preferred Stock having terms and conditions not materially
different from those set forth in Exhibit A , except as
required by the rules and regulations of the NYSE Alternext U.S.,
f/k/a the American Stock Exchange and waives its right under
Section 6.12 of the Stock Purchase Agreement to participate in
such offer and sale by the Company of the Series C Preferred Stock.
In addition, Barron hereby expressly waives any right it may have
to claim that the offer and sale of such Series C Preferred Stock
by the Company is a violation, or constitutes a breach, of any of
the terms of the Stock Purchase Agreement.
3. Agreement to Vote Shares .
Commencing with the execution and delivery of this Agreement, at
every meeting of the shareholders of the Company called with
respect to any of the following, and at every adjournment or
postponement thereof, and on every action or approval by written
consent of the shareholders of the Company with respect to any of
the following, Barron shall vote the Voting Shares in favor of:
(a) the adoption and approval of Articles of Amendment to the
Amended and Restated Articles of Incorporation of the Company
setting forth the rights and preferences of the Series C Preferred
Stock, which terms and conditions shall not be materially different
from those set forth in Exhibit A , except as required by
the rules and regulations of the NYSE Alternext U.S., f/k/a the
American Stock Exchange and (b) the approval of the issuance
of the shares of such Series C Preferred Stock.
4. Irrevocable Proxy .
Concurrently with the execution of this Agreement, Barron agrees to
deliver to the Board of Directors of the Company (the “
Board ”) a proxy in the form attached hereto as
Exhibit B (the “ Proxy ”), which shall be
irrevocable to the extent provided in Section 607.0722 of the
Florida Business Corporation Act, with respect to the shares
referred to therein.
5. Termination of Barron’s
Obligations . Barron’s obligations pursuant to Sections 3
and 4 of this Agreement shall terminate upon the date of issuance
of the Series C Preferred Stock to Mr. O’Donnell and
certain of his affiliates (the “ Termination Date
”).
6. Restriction on Transfer of
Voting Rights . During the period beginning on the date of
execution of this Agreement and ending on the Termination Date,
Barron shall not, directly or indirectly (a) cause or permit
any Transfer of any of the Voting Shares, (b) cause or permit
any deposit of the Voting Shares into a voting trust; or
(c) grant any proxy (other than the Proxy granted herein) or
enter into any voting agreement or similar agreement with respect
to any of the Voting Shares.
7. Consideration . In
consideration of the waivers, consents and agreements described
herein, the Company agrees as follows:
(a) If, at June 30, 2009, the
Company does not have a Consolidated EBITDA (as defined below) that
is equal to or greater than $3,000,000, the Company will
promptly
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pay, in cash, to Barron $0.015 per
share for each share of Common Stock owned by Barron on
June 30, 2009.
8. Definitions . For purposes
of this Agreement, the following terms shall be defined as
follows:
i. “ Capital Stock
” means (1) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in
capital stock (whether voting or nonvoting, and whether common or
preferred) of such corporation, and (2) with respect to any
Person that is not a corporation, any and all partnership,
membership, limited liability company or other equity interests of
such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
ii. “ Consolidated
EBITDA ” means, for the Reference Period, the aggregate
of (1) Consolidated Net Income for such period, plus
(2) the sum of (A) interest expense, (B) federal,
state, local, foreign and other income taxes, and
(C) depreciation and amortization of intangible assets,
(D) extraordinary losses and charges, (E) the amount of
any non-cash write-down of goodwill and (F) Any equity
compensation expense, minus (3) the sum of
(A) extraordinary gains or income and (B) noncash credits
increasing income for such period, all to the extent taken into
account in the calculation of Consolidated Net Income for such
period.
iii. “ Consolidated Net
Income ” means, for the Reference Period, net income (or
loss) for the Company and its Subsidiaries for the Reference
Period, determined on a consolidated basis in accordance with GAAP
(after deduction for minority interests); provided that, in
making such determination, there shall be excluded (1) the net
income of any other Person that is not a Subsidiary of the Company
(or is accounted for by the Company by the equity method of
accounting) except to the extent of actual payment of cash
dividends or distributions by such Person to the Company or any
Subsidiary of the Company during such period, (2) the net
income (or loss) of any other Person acquired by, or merged with,
the Company or any of its Subsidiaries for any period prior to the
date of such acquisition, and (3) the net income of any
Subsidiary of the Company to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary of
such net income is not at the time permitted by operation of the
terms of its charter, certificate of incorporation or formation or
other constituent document or any agreement or instrument or
Requirement of Law applicable to such Subsidiary.
iv. “ GAAP ”
means generally accepted accounting principles in the United States
of America, as set forth in the statements, opinions and
pronouncements of the Accounting Principles Board, the American
Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained, as
in effect from time to time.
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v. “ Governmental
Authority ” means the government of the United States of
America or any other nation, or of any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining
to government (including any supra-national bodies such as the
European Union or the European Central Bank).
vi. “ Person ”
means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
vii. “ Reference Period
” with respect to any date of determination, means the period
beginning on January 1, 2009 and ending on June 30,
2009.
viii. “ Requirement of
Law ” means, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws
or other organizational or governing documents of such Person, and
any statute, law, treaty, rule, regulation, order, decree, writ,
injunction or determination of any arbitrator or court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any
of its property is subject or otherwise pertaining to any or all of
the transactions contemplated by this Agreement.
ix. “ Subsidiary
” means, with respect to any Person, any corporation or other
Person of which more than 50% of the outstanding Capital Stock
having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such
Person, is at the time, directly or indirectly, owned or controlled
by such Person and one or more of its other Subsidiaries or a
combination thereof (irrespective of whether, at the time,
securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the
happening of any contingency). When used without reference to a
parent entity, the term “Subsidiary” shall be deemed to
refer to a Subsidiary of the Company.
x. a Person s
