EXHIBIT 10.5
AMENDED AND RESTATED NOTE
-------------------------
$100,000.00 May 16, 2005
(amended and restated as of February 14, 2006)
FOR VALUE RECEIVED, the undersigned QUEST MINERALS & MINING CORP., a
Utah corporation (together with its successors and assigns, the "Borrower"),
hereby promises to pay to the order of PROFESSIONAL TRADERS FUND LLC, a New York
limited liability company (together with its successors and assigns, the
"Lender"):
(a) the principal amount of ONE HUNDRED THOUSAND DOLLARS
($100,000.00), evidencing the stipulated balance of the Loans made by
the Lender to the Borrower pursuant to the Credit Agreement dated as of
May 16, 2005 (as amended and in effect from time to time, the "Credit
Agreement") by and between the Borrower and the Lender, which principal
amount shall be paid from time to time in accordance with the terms of
the Credit Agreement;
(b) interest from the date hereof on the principal amount
from time to time outstanding to and including the maturity hereof at
the rates and terms and in all cases in accordance with the terms of
the Credit Agreement; and
(c) any and all other amounts at any time due under this
Note or otherwise due with respect to this Note under the Credit
Agreement or any other Loan Documents, including, without limitation,
prepayment premiums, late charges, default interest, collection costs
and attorney's fees, and advances to protect the security of the
Security Documents.
The then outstanding principal balance of this Note, together with any
and all unpaid interest and any and all other such amounts then due and payable,
if not sooner paid in accordance with the terms of this Note and the Credit
Agreement, shall be due and payable in full on the Maturity Date. This Note is
an amendment, modification and restatement of that certain note dated May 16,
2005 in the aggregate principal amount of up to $500,000 made by Borrower in
favor of Lender (the "Original Note") which Original Note is not being repaid or
refinanced by virtue of the issuance and acceptance of this instrument. It is
the intent of Xxxxxxxx and Xxxxxx that the Indebtedness of this instrument shall
be a continuance of the Indebtedness of the Original Note.
All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Lender and
any holder hereof is entitled to the benefits of the Credit Agreement, the
Security Documents and the other Loan Documents, and may enforce the agreements
of the Borrower contained therein, and any holder hereof may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof.
The Borrower irrevocably authorizes the Lender to make or cause to be
made, at the time of receipt of any payment of principal of this Note, an
appropriate notation on the grid attached to this Note, or the continuation of
such grid, or any other similar record, including computer records, reflecting
the receipt of such payment. The outstanding amount of the Loan set forth on the
grid attached to this Note, or the continuation of such grid, or any other
similar record, including computer records, maintained by the Lender with
respect to the Loan shall be prima facie evidence of the principal amount of the
Loan owing and unpaid to the Lender, but the failure to record, or any error in
so recording, any such amount on any such grid, continuation or other record
shall not limit or otherwise affect the obligation of the Borrower hereunder or
under the Credit Agreement to make payments of principal of and interest on this
Note when due.
The Borrower has the right in certain circumstances and may have the
obligation under certain other circumstances to prepay the whole or part of the
principal of this Note on the terms and conditions specified in the Credit
Agreement.
If any one or more Events of Default shall occur and be continuing, the
entire unpaid principal amount of this Note and all of the unpaid interest
accrued thereon and other amounts due hereunder may become or be declared due
and payable in the manner and with the effect provided in the Credit Agreement.
Notwithstanding the foregoing, upon an Event of Default, Lender shall have the
option to convert this Note (and any accrued interest thereon may be converted,
in whole or in part into such number of shares (the "Conversion Shares") of the
Common Stock of the Borrower, $0.001 par value per share (the "Common Stock")
equal to the quotient of (a) the sum of the total unpaid principal being
converted under this Note, and the total accrued interest under this Note
through the date of conversion applicable to such principal that is being
converted and (b) the Conversion Price. For example, if the principal amount of
this Note were $5,000 and interest had accrued in the amount of $500, then this
Note would be convertible into 55,000 Conversion Shares. For the purposes of
this Note, the original "Conversion Price" shall equal Fifty Cents ($0.50) and
shall be subject to adjustment as set forth in the two paragraphs below. The
Conversion Shares, when issued, shall be duly authorized, fully paid and
nonassessable shares of Common Stock of the Borrower.
Borrower shall not effect any conversion of this Note and no holder of
this Note shall have the right to convert any portion of this Note pursuant to
the preceding paragraph to the extent that after giving effect to such
conversion such holder (together with such holder's affiliates) (A) would
beneficially own in excess of 4.99% of the outstanding shares of the Common
Stock following such conversion and (B) would have acquired, through conversion
of this Note or otherwise, in excess of 4.99% of the outstanding shares of the
Common Stock following such conversion during the 60-day period ending on and
including such conversion date. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by a holder and its
affiliates or acquired by a holder and its affiliates, as the case may be, shall
include the number of shares of Common Stock issuable upon conversion of this
Note with respect to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be issuable upon
(i) conversion of the remaining, unconverted Note beneficially owned by such
holder and its affiliates and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Borrower (including, without
limitation, any warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the
preceding sentence, for purposes of this paragraph, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. Notwithstanding anything to the contrary contained herein,
each conversion notice submitted by a holder of this note (a "Conversion
Notice") shall constitute a representation by the holder submitting such
Conversion Notice that, after giving effect to such Conversion Notice, (A) the
holder will not beneficially own (as determined in accordance with this
paragraph) and (B) during the 60-day period ending on and including such
conversion date, the holder will not have acquired, through conversion of this
Note or otherwise, a number of shares of Common Stock in excess of 4.99% of the
outstanding shares of Common Stock as reflected in the Borrower's most recent
Form 10-QSB or Form 10-KSB, as the case may be, or more recent public press
release or other public notice by the Borrower setting forth the number of
shares of Common Stock outstanding, but after giving effect to conversions of
this Note by such holder since the date as of which such number of outstanding
shares of Common Stock was reported.
If at any time or from time to time after the date of execution of this
Amended and Restated Note (the "Execution Date") when any principal amount under
this Note is outstanding, the Borrower fixes a record date for the effectuation
of a split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), the Conversion Price shall be appropriately decreased and the
number of Conversion Shares issuable to the Holder on exercise of this Note
shall be increased in proportion to such increase of the aggregate total of the
shares of Common Stock outstanding and shares issuable with respect to such
Common Stock Equivalents. In the event that, following any adjustment pursuant
to this paragraph with respect to Common Stock Equivalents, the right to acquire
shares of Common Stock pursuant to such Common Stock Equivalents shall expire or
be terminated unexercised, there shall be a proportionate readjustment to
increase the Conversion Price and decrease the number of Conversion Shares.
If at any time or from time to time after the Execution Date and while
this Note, or any portion thereof, is outstanding, the number of shares of
Common Stock is decreased by a combination (by reverse stock split or otherwise)
of the outstanding shares of Common Stock, then, following the record date of
such combination, the Conversion Price shall be appropriately adjusted and the
Holder shall receive, in lieu of the Conversion Shares issuable on such
conversion immediately prior to such effective date, the Common Shares or other
capital stock to which the Holder would have been entitled if the Holder had so
converted this Note immediately prior thereto, all subject to successive
adjustments thereafter from time to time pursuant to, and in accordance with,
the provisions of this paragraph.
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any future occasion.
The Borrower and every endorser and guarantor of, and every other
person now or otherwise liable under or in respect of, this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices (except any demands or notices expressly provided
for in the Loan Documents) in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY CERTIFIED OR REGISTERED
MAIL AT THE ADDRESS SPECIFIED IN THE CREDIT AGREEMENT. THE BORROWER HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed
by its duly authorized officer as of the 14th day of February 2006.
QUEST MINERALS & MINING CORP.
By: /s/ XXXXXX XXXXXXXXXXX, XX.
-------------------------------------
Name: Xxxxxx Xxxxxxxxxxx, Xx.
Title: Vice President
----------------------------------------------------------------------------
Amount of
Principal Balance of
Amount Paid or Principal Notation
Date of Loan Prepaid Unpaid Made By:
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
----------- ------------- ---------------- ---------------- ----------------
