FEARLESS INTERNATIONAL, INC.
927 LINCOLN ROAD, SUITE 200
MIAMI, FLORIDA 33139
May 30, 2008
VIA EMAIL AND FACSIMILE
Midsummer Ventures, LP
c/o Midsummer Capital, LLC
295 Madison Avenue, 38th Floor
New York, New York 10017
Mahoney Associates, Inc.
c/o LH Financial Services Corp.
150 Central Park South, 2nd Floor
New York, New York 10019
Re: EXTENSION OF MATURITY DATE FOR DECEMBER 2007 NOTES
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To whom it may concern:
Reference is made to the Secured Promissory Notes (the "NOTES") issued by
Fearless International, Inc., a Nevada corporation (the "COMPANY"), on November
15, 2007, to each of Midsummer Ventures, LP ("MIDSUMMER") and Mahoney
Associates, Inc. ("MAHONEY" and collectively, the "INVESTORS") pursuant to that
certain Loan and Security Agreement, dated November 15, 2007 (the "LOAN
AGREEMENT"). Capitalized terms used but not defined in this Letter Agreement
(this "AGREEMENT") shall have the meaning given to such terms in the Notes or
the Loan Agreement.
Subject to each Investor's agreement to extend the Maturity Date until July
24, 2008, which agreement shall be evidenced by such Investor's signature at the
end of this Agreement, the Company hereby notifies the Investors that in
consideration of such extension:
(a) as a forbearance fee only and not as a payment of principal or
interest on the Notes, on the date hereof the Company shall pay each
Investor $15,000 via wire transfer in immediately available funds pursuant
to the bank account set forth on each Investor's signature page hereto;
(b) the principal amount of the Notes is hereby increased as set
forth on SCHEDULE I attached hereto;
(c) Until July 24, 2008, in the event that the Company receives
any cash proceeds, through any means or any source, including but not
limited to, cash receivables and revenues or through the issuance of equity
or debt securities, other than indebtedness not secured by any assets of
the Company and subordinated in writing to the Investors, pursuant to a
written agreement acceptable to the Investors, ("CASH INFUSION"), the first
$200,000, in the aggregate, of such Cash Infusion (net of reasonable and
customary fees
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incurred directly in connection with such Cash Infusion) shall be applied
according to the following schedule:
(i) the first $50,000 shall be used by the Company for working
capital of the Company or its subsidiaries;
(ii) the second $50,000 shall be immediately paid to the
Investors, ratably, applied to outstanding principal on the Notes;
(iii) the third $50,000 shall be used by the Company for working
capital of the Company or its subsidiaries; and
(iv) the fourth $50,000 shall be immediately paid to the Investors
ratably, applied to outstanding principal on the Notes.
Prior to July 24, 2008, Cash Infusions in excess of $200,000, other than
Cash Infusions derived from indebtedness not secured by any assets of the
Company and subordinated in writing to the Investors, pursuant to a written
agreement acceptable to the Investors, in the aggregate, shall be paid and split
as received 75% to the Investors ratably, applied to outstanding principal on
the Notes, and 25% to be used by the Company for working capital of the Company
or its subsidiaries. On or after July 24, 2008 the Notes shall be immediately
due and payable in full and 100% of any cash on hand (whether from prior Cash
Infusions or otherwise) or new Cash Infusions must be used first to pay-off the
Notes in full;
(d) the Company will issue one million (1,000,000) shares of Common Stock
(the "SHARES") to each Investor no later than the tenth Trading Day after the
date hereof; and
(e) the Company shall execute the Confession of Judgment, attached hereto
as EXHIBIT B, in favor of each of the Investors and the Company shall provide
each such duly executed Confession of Judgment to each such Investor
simultaneously herewith. The parties agree that the Confession of Judgment shall
be held in escrow by the Investors and shall not be filed or released from
escrow prior to July 24, 2008. Should the Company satisfy the Notes in full
prior to July 24, 2008, the Confession of Judgment shall be returned to the
Company and shall otherwise be null and void.
Each of the undersigned represents and warrants that it is the sole holder
of any interest in the Notes originally issued to it, that it has not
transferred, pledged or otherwise disposed of any interest therein and that the
undersigned has the authority to sign this Agreement and give the waivers set
forth herein.
The Company hereby represents and warrants to each of the Investors that
the Shares are duly authorized and, when issued and paid for, will be duly and
validly issued, fully paid and nonassessable, free and clear of all liens,
charges, security interests, encumbrances, right of first refusals, preemptive
rights or other restrictions imposed by the Company. The Company has
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reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable pursuant to this Agreement.
Subject to each Investor's agreement, which agreement shall be evidenced by
such Investor's signature at the end of this Agreement, (a) within 1 business
day of the date of this Agreement, we shall file a Current Report on Form 8-K,
reasonably acceptable to each Investor disclosing the material terms of this
Agreement and (b) within 3 business days of the date of this Agreement, we shall
deliver an amended and restated Note to each Investor reflecting the increased
principal amounts set forth on SCHEDULE I.
Except as expressly set forth herein, all terms, conditions and provisions
of the Notes shall remain in full force and effect. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together, when executed and delivered by facsimile or .pdf
copies, shall constitute one and the same instrument.
***************
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Please indicate your agreement to the foregoing by signing in the space
provided below, whereupon this Agreement shall become a binding agreement
between us.
FEARLESS INTERNATIONAL, INC.
BY:
-----------------------------
Name:
Title:
MIDSUMMER VENTURES, LP
BY:
- ----------------------------
Name:
Title:
WIRE INSTRUCTIONS:
- ------------------
MAHONEY ASSOCIATES, INC.
BY:
- ----------------------------
Name:
Title:
WIRE INSTRUCTIONS:
- ------------------
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SCHEDULE I
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- ------------------------- ------------------------- ------------------------
Name Previously Outstanding Amended Outstanding
Principal Amount Principal Amount
- ------------------------- ------------------------- ------------------------
Midsummer Ventures LP $360,000 $427,500
- ------------------------- ------------------------- ------------------------
Mahoney Associates, Inc. $360,000 $427,500
- ------------------------- ------------------------- ------------------------
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