Banks.com reaches agreement with investors regarding 13.5% notes

By Devika Patel

Knoxville, Tenn., Jan. 12 - Banks.com, Inc. is amended the terms of the $7 million in 13.5% senior subordinated notes due 2011 it sold in a private placement, according to an 8-K filed Monday with the Securities and Exchange Commission.

The investors, Capital South Partners Fund I LP, Capital South Partners Fund II LP and Harbert Mezzanine Partners II SBIC, LP, agreed to modify the definition of consolidated EBITDA, to include the amount of any non-cash write-down of goodwill and accelerate the notes' maturity date to June 30, 2010 from July 21, 2011.

The new amendment also requires the company to use the proceeds of any federal or state income or other tax refund in excess of $5,000 to repay the company's obligations under the notes and adds a new covenant stating that the company must try to sell some of its domain name assets for a cash amount mutually agreed upon by the company and the lenders by March 31, 2009. These proceeds will be used to prepay the principal balance on the notes.

San Francisco-based Banks.com is a provider of internet advertising services that facilitate access to relevant information on the internet and offers its customers a range of online financial services products.

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