Ideation Acquisition Corp. 1990S.Bundy Drive, Suite620 Los Angeles, CA 90025

EXHIBIT 10.1

 

Ideation Acquisition Corp.
1990 S. Bundy Drive, Suite 620
Los Angeles, CA 90025

 

September 8, 2009

 

To the Investors Listed on Exhibit A Hereto (“Investors”)

 

Re:  Exchange of Securities of SearchMedia Holdings Limited

 

Ladies and Gentlemen:

 

Reference is made to the Agreement and Plan of Merger, Conversion and Share Exchange, dated as of March 31, 2009, by and among Ideation Acquisition Corp. (“Ideation”), SearchMedia International Limited (“SM Cayman”) and the other parties named therein, as amended and as may be further amended from time to time (the “Agreement”). All capitalized terms used but not defined herein shall have the definitions set forth in the Agreement.

 

For a period of two years from and after the Closing Date, if ID Cayman issues, on any one or more occasions, any preferred shares and/or other equity security (or any security convertible into or exchangeable or exercisable for preferred shares and/or other equity security) (a “Financing”), then each of the undersigned Investors (and its successors, assigns and transferees) shall have the right to cause ID Cayman to repurchase its Acquired Shares (as converted into ID Cayman Shares pursuant to the Conversion), Warrant Shares and Note Shares in exchange for new securities of the same class or series of preferred shares and/or other equity securities issued pursuant to such Financing (“New Securities”) on the same terms and conditions of such Financing; provided that each such Acquired Share, Warrant Share and Note Share shall be valued at $7.8815 per share for purposes of calculating the number of New Securities to be issued to such Investor (subject to adjustment for share splits, dividends, recapitalizations, and other similar events). Each such Investor will be entitled to all the same rights and privileges as the participants in such Financing on a pari passu basis. Notwithstanding the foregoing, the undersigned Investors, as a group, may only exchange a number of such shares with an aggregate dollar value equal to the aggregate dollar amount of New Securities sold in the Financing.

 

The undersigned Investors may exercise the exchange rights set forth in this letter upon any successive Financing that closes within two years after the Closing Date with respect to (a) any New Securities received upon any prior exchange hereunder and (b) any Acquired Shares (as converted into ID Cayman Shares pursuant to the Conversion), Warrant Shares and Note Shares not previously exchanged pursuant to this letter. The valuation of New Securities being exchanged in connection with such successive financing shall be based upon the valuation of such shares at the time of issuance, plus all accrued and unpaid dividends, interest or other payment rights (all subject to adjustment for share splits, dividends, recapitalizations, and other similar events). Ideation hereby agrees that it will provide the undersigned Investors with thirty (30) days advance written notice of any proposed Financing, and each such Investor shall have a period of twenty-five (25) days after receipt of such notice to elect to exchange all or any portion of its securities hereunder by written notice to ID Cayman. Notices shall be provided hereunder in the same manner provided in the Agreement, to ID Cayman at the address of its principal office and to the Investors at the addresses set forth in Exhibit A hereto.

 

On or prior to the Closing, Ideation shall sign a counterpart of this Agreement with each other Person who acquires Acquired Shares or who will acquire at or after the Closing any Warrant Shares or Note Shares, and such Persons shall be deemed “Investors” hereunder.

 

In the event that the Agreement is terminated, this letter agreement shall also terminate and be of no force or effect. Furthermore, this letter agreement is enforceable by any Investor who is a signatory hereto, regardless of whether or not it has been signed by any other Investor.

Please indicate your consent to the aforementioned by signing this letter in the space indicated below and returning it to Ideation.

 

Very truly yours,

 

IDEATION ACQUISITION CORP.

 

Name:     Robert N. Fried

Officer

ACKNOWLEDGED AND AGREED

this 8^th day of September, 2009:

 

Frost Gamma Investments Trust

 

Name:     Phillip Frost

 

The Frost Group, LLC

 

Name:     Steven D. Rubin

 

Linden Ventures II (BVI), Ltd.

 

Name:     Craig Jarvis

China Seed Ventures, L.P.

 

Name:     Earl Ching-Hwa Yen

 

Qinying Liu

 

Le Yang

 

Xuebao Yang

 

Min Wu

 

Chardan Securities LLC

 

Name:     Kerry Propper

 

Min Wu

 

Robert Fried

 

Rao Uppaluri

 

Halpryn Capital Partners LLC

 

Name:     Glenn Halpryn

Exhibit A

 

Investors

 

Frost Gamma Investments Trust

c/o Frost Administrative Services, Inc.

4400 Biscayne Boulevard, 15th Floor

Miami, Florida 33137

 

The Frost Group, LLC

4400 Biscayne Boulevard, 15th Floor

Miami, Florida 33137

New York, New York 10022

 

China Seed Ventures, L.P.

Rm. 104, Bldg. 18

No. 800 Huashan Road

Shanghai, 200050, China

 

Qinying Liu

Room 4B, Yinglong Building

No. 1358 Yan An Road West

Shanghai 200052, China

 

Le Yang

Room 4B, Yinglong Building

No. 1358 Yan An Road West

Shanghai 200052, China

 

Xuebao Yang

Room 4B, Yinglong Building

No. 1358 Yan An Road West

Shanghai 200052, China

 

Jianhai Huang

Room 4B, Yinglong Building

No. 1358 Yan An Road West

Shanghai 200052, China

 

Halpryn Capital Partners LLC

4400 Biscayne Boulevard, Suite 950

Miami, Florida 33137

 

Linden Ventures II (BVI), Ltd.

c/o Linden Advisors

590 Madison Avenue, 15th Floor

 

Rao Uppaluri

4400 Biscayne Boulevard, 15th Floor

Miami, Florida 33137

 

Robert Fried

4400 Biscayne Boulevard, 15th Floor

Miami, Florida 33137

 

Chardan Securities LLC

17 State Street, Suite 1600

New York, NY 10004

 

Min Wu

Room 4B, Yinglong Building

No. 1358 Yan An Road West

Shanghai 200052, China