Exhibit 10.13b
February 1, 2002
iNetNow, Inc.
4322 Wilshire Boulevard
Second Floor
Los Angeles, California 90010
Attention: Mr. Errol Gerson, Chief Executive Officer
Re: Agreement between i3 Mobile. Inc. and iNetNow, Inc., dated as of
October 1, 2001
Gentlemen:
Reference is made to that certain Agreement, dated as of October 1, 2001, (the
"Agreement") between iNetNow, Inc. ("iNetNow") and 13 Mobile, Inc. ("i3"), as
amended on November 7, 2001 (the "Amendment"). This letter sets forth the
agreement between iNetNow and i3 with respect to the subject matter thereof, and
shall supersede any aspect of the Agreement and/or the Amendment contrary to or
inconsistent with the terms regarding the subject matter hereof. Capitalized
terms used but not otherwise defined herein shall have the meanings set forth in
the Agreement and the Amendment.
1. Indebtedness. (a) Upon satisfactory completion (as determined by i3 in its
sole discretion) of the matters set forth in Sections 2-4 below, 13 shall
irrevocably forgive any and all debts and obligations in excess of $675,600.00
outstanding as of January 15, 2002 (including interest expenses) pursuant to
Section 1.7 of the Agreement (as amended) and that certain Senior Secured
Promissory Note, dated October 17, 2001, of iNetNow in favor of i3.
(b) The last three sentences of Section 1.8 of the Agreement (as amended)
are hereby deleted in their entirety and replaced with the following:
"In the event that the Fee for any month is less than the Expense
Payment for such month, then the following calculations shall apply to
determine the amount of the additional advance for such month
(collectively, "Incremental Debt") under the Senior Secured Promissory
Note, dated October 17, 2001, between iNetNow and i3, and shall increase
the outstanding indebtedness of iNetNow to i3 thereunder: (i) if the excess
of Expense Payment for such month over the Fee for such month ("Monthly
Excess") is less than the Expense Payment less any amounts attributable to
salary and benefits for i3Mobile-Dedicated Personnel ("Non-Payroll
Expenses") then the Incremental Debt for that month shall be equal to the
Monthly Excess; and (ii) if the Monthly Excess is greater than the
Non-Payroll Expenses then the Incremental Debt for that month shall be
equal to the Non-Payroll Expenses. In the event that the Fee for any month
is greater than the Expense Payment for such month, then, in lieu of i3
paying such Fee, there shall be credited against the $675,600.00, plus
Incremental Debt and accrued interest, owed to i3 as of January 15, 2002,
as partial repayment thereof, the amount by which such Fee exceeds such
Expense Payment. Such crediting and partial repayment shall continue until
such $675,600.00, plus any Incremental Debt and accrued interest, has been
fully repaid, and thereafter i3 shall pay to iNetNow the monthly Fee in
cash to the extent in excess of such monthly Expense Payment."
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2. Transfer of Customers. Concurrently with the execution of this agreement,
iNetNow provided i3 with an accurate and complete list of iNetNow's current
customers as of the date hereof; including information regarding the service
ordered by each such customer, and each such customer's name, billing address,
billing and usage history, email address, home, mobile and work telephone
numbers, and any other information relevant to the servicing of such customer's
business and the billing and collection of charges therefor from such customer
in connection with iNetNow's business. iNetNow agrees and acknowledges that i3
shall have the right to contact, market to, encourage and induce such customers
to subscribe to i3's mobile concierge service (currently known as "Pronto")
instead of iNetNow' s service offering, and iNetNow shall cooperate with and
assist i3 in connection therewith. iNetNow will cease offering services to these
customers on and after February 28, 2002. iNetNow hereby waives any claims,
known or unknown, in law or in equity, which it has or may have relating to the
exercise by i3 of its rights under this Section 2.
3. Software License Agreement. In connection with the execution and delivery of
this agreement, and as a material portion of the consideration therefor, iNetNow
shall execute and deliver the Software License Agreement, in the form attached
hereto as Exhibit i3, concurrently with the execution and delivery of this
agreement. i3 shall have the tight, exercisable at any time until the fifth
anniversary of the date hereof; to execute and deliver a. counterpart of such
Software License Agreement to iNetNow, and such Software License Agreement shall
be effective from the date of the delivery thereof to iNetNow by i3 until the
fifth anniversary of the date hereof.
4. Corporate Documents. As soon as possible following the date hereof; and in
any event prior to February 25, 2002, iNetNow shall take all necessary measures
(including, without limitation, obtaining the consents of its Board of Directors
in substantially the form of Exhibit A-1 hereto and the owners of a majority of
its capital stock in the form of Exhibit A-2 hereto, if applicable) to (i) adopt
and file the amendments to its Certificate of Incorporation in the form of
Exhibit A-3 hereto, and (ii) to issue to i3 in consideration of the forgiveness
of the indebtedness described in Section 1 above 100 shares of iNetNow's Class B
Common Stock, consisting of all of the authorized shares of Class B Common Stock
set forth in Exhibit A3, all of which shall be validly issued, fully paid and
non-assessable, and free and clear of all liens, encumbrances, claims, security
interests, pledges and other restrictions (other than those imposed by
applicable securities law). i3 agrees that it will surrender these shares to
iNetNow at such time when iNetNow fully pays or earns down its outstanding
indebtedness to i3 and the balance remains at zero for a period of at least
thirty (30) days.
5. Waiver of Exclusivity. Notwithstanding the terms of the Amendment, iNetNow
shall hereafter have the right to grant non-exclusive licenses to its software
to any third party for use in the United States and its territories and
possessions during the Term of the Agreement.
6. Employees. Upon the occurrence of a "Trigger Event" (as defined below), i3
shall have the right to directly or indirectly hire or employ (contractually or
otherwise) those persons listed on Exhibit C hereto, and to solicit, induce and
encourage such persons to accept employment with i3, and upon the occurrence of
a Trigger Event, iNetNow shall be deemed to irrevocably waive any and all
claims, known or unknown, in law or in equity, against i3 and each such person
which arise out of or relate to the hiring or employment of any such person by
i3, including, without limitation, any claims in respect of the breach of any
terms of any employment agreements, company policies, noncompetition covenants,
etc. between iNetNow and such persons which breach is a result of the hiring or
employment of such persons by i3. A "Trigger Event," as used herein, shall mean
any of the following:
(a) Any sale of all or substantially all of the capital stock or
assets of. iNetNow;
(b) Any merger or other reorganization of iNetNow with, or into
another corporation such that (i) iNetNow is not the surviving
corporation following such merger and (ii) the stockholders of iNetNow
prior to such transaction own less than 50% of the outstanding voting
equity securities of the surviving corporation after such transaction;
or
(c) Any event whereby iNetNow (i) commences a voluntary case
under the Federal bankruptcy laws (as now or hereafter in effect),
(ii) files a petition seeking to take advantage of
Revised February 1, 2002
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any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, liquidation, winding up or
composition or adjustment of debts, (iii) consents to arty
petition filed against it in an involuntary case under such
bankruptcy laws or other similar laws, (iv) applies for or
consents to the appointment of the taking of possession by, a
receiver, custodian, trustee, liquidator or the like of itself
or of a substantial part of its assets, domestic or foreign,
(v) admits in writing its inability to pay, or generally not
be paying, its debts (other than those that are the subject of
bona fide disputes) as they become due, (vi) makes a general
assignment for the benefit of creditors, (viii) is the subject
of an involuntary case under bankruptcy laws or other similar
laws, which case is not dismissed within 30 days, or (viii)
takes any corporate action for the purpose of effecting any of
the foregoing.
Except as specifically set forth above, all terms and conditions set forth in
the Agreement and the Amendment shall remain unchanged, and in full force and
effect. This agreement cannot be amended except by a writing signed by
authorized representatives of both parties. Sections 15 through 23, the second
sentence of Section 24, and Sections 25 and 26 of the Agreement are hereby
incorporated by reference, rnutatis mutandis, and shall have the same force and
effect with respect to this agreement as if fully set forth herein.
Please indicate your agreement with the forgoing by executing this agreement in
the appropriate space indicated below
i3 MOBILE, INC.
/s/ John A. Lack
- ----------------------------------
Name: John A. Lack
Title: President and Chief
Executive Officer
iNetNow, INC.
/s/ Errol M. Gerson
----------------------------
Name: Errol M. Gerson
Title: CEO
Revised February 1, 2002
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