EXHIBIT 3.1
NOTE AND WARRANT PURCHASE AGREEMENT
THIS NOTE AND WARRANT PURCHASE AGREEMENT (the "AGREEMENT"), dated as of
November 1, 2006, is entered into by and between UNITED MEDICORP, INC., a
Delaware corporation ("COMPANY"), and XXXXXXX FINANCIAL GROUP, L.L.C., an
Illinois limited liability company ("PURCHASER").
RECITALS
WHEREAS, Company wishes to borrow from Purchaser Seventy Six Thousand
Dollars ($76,000), and Purchaser is willing to extend such a loan to Company on
the condition that Company issues to Purchaser a secured promissory note and a
warrant to acquire specified securities of Company, and Company is willing to
agree to such condition;
WHEREAS, to secure its obligations under the Note (as defined below),
concurrently herewith, Company and Purchaser are entering into a Security
Agreement (the "SECURITY AGREEMENT"), in the form attached as Exhibit A and Deed
of Trust pursuant to which Company is granting Purchaser a security interest in
certain of Company's personal and real property;
NOW, THEREFORE, IT IS AGREED THAT:
1. NOTE AND WARRANT.
(a) Issuance of Note and Warrant. Subject to the terms and conditions
hereof, Company shall issue and sell to Purchaser, and Purchaser shall purchase
from Company, a Secured Promissory Note in the form of Exhibit B hereto (the
"NOTE") in the principal amount of Seventy Six Thousand Dollars ($76,000) and a
warrant in the form of Exhibit C hereto (the "WARRANT") to purchase Three
Million Eight Hundred Thousand (3,800,000) shares of Company's common stock, par
value $0.01 (the "COMMON STOCK"). The terms and conditions of the Note are set
forth in the form of Note attached as Exhibit B hereto and of the Warrant are
set forth in the form of Warrant attached as Exhibit C.
(b) Closing. Subject to the provisions of Sections 5 and 6, the
closing (the "CLOSING") of the purchase and sale of the Note and Warrant shall
be held at the offices of Purchaser at 000 X. Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx,
XX 00000, at 2:00 p.m., local time, on November 1, 2006, or at such other time
and place as Company and Purchaser agree.
(c) Delivery. At the Closing, Company shall deliver to Purchaser the
Note, the Warrant and the Common Shares (as defined below) to be purchased by
Purchaser against Company's receipt of the purchase price for the Note, the
Warrant and the Common Shares (collectively, the "ACQUISITION SECURITIES").
2. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company hereby represents and
warrants to Purchaser that, except as set forth in the Schedule of Exceptions
attached hereto as Exhibit D, as of the Closing, except as otherwise stated to
the contrary herein:
(a) Organization and Standing; Articles and Bylaws. Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted. Each of the Subsidiaries is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of its state of incorporation or formation (as the
case may be) and has all requisite corporate or limited liability company power
and authority to carry on its business as now conducted.
(b) Corporate Power; Binding Obligations. Company has all requisite
legal and corporate power to enter into, execute and deliver this Agreement, the
Acquisition Securities and the other Transaction Documents. This Agreement and
the other Transaction Documents are valid and binding obligations of Company,
enforceable in accordance with their terms, except as the same may be limited by
bankruptcy, insolvency, moratorium, and other laws of general application
affecting the enforcement of creditors' rights and by general principles of
equity.
(c) Authorization. All corporate and legal action on the part of
Company, its officers, directors and stockholders needed for Company to issue
the Acquisition Securities and to perform its obligations hereunder and under
the Note, the Warrant and the other Transaction Documents have been taken or
will be taken prior to the Closing.
(d) No Liens. The Acquisition Securities, when issued in compliance
with the provisions hereof, will be free of any liens or encumbrances; provided,
however, that the Acquisition Securities may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein.
(e) Compliance with Other Instruments. None of Company Group is in
violation or default of any term of its certificate of incorporation, operating
agreement or bylaws, or of any provision of any mortgage, indenture, agreement,
instrument or contract to which it is party or by which it is bound or of any
judgment, decree, order, writ or, to its knowledge, any statute, rule or
regulation applicable to Company Group or any of which would materially and
adversely affect Company's business, assets, liabilities, financial condition,
operations or prospects. Company's execution, delivery, and performance of and
compliance with this Agreement, and the issuance and sale of the Acquisition
Securities and the securities issuable upon conversion of the Warrant (the
"WARRANT SHARES"; together with the Acquisition Securities, collectively the
"SECURITIES") will not, with or without the passage of time or giving of notice,
result in any such material violation, or be in conflict with or constitute a
default under any such term, or result in the creation of any Lien upon any of
Company Group's assets or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit license, authorization or approval applicable to
Company Group, its business or operations or any of its assets.
(f) Preemptive Rights. No party has any right of first refusal or any
preemptive rights with respect to the issuance of any of the Securities.
(g) Government Consent. No consent, approval, order or authorization
of, or designation, registration, declaration or filing with, any federal, state
or other governmental authority on Company Group's part is required in
connection with the valid execution and delivery of this Agreement, the Note,
the Warrant and the other Transaction Documents or the
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offer, sale or issuance of the Acquisition Securities, other than filings made
prior to the Closing, except for (i) any notices of sales required to be filed
with the SEC under Regulation D of the Securities Act, or (ii) other applicable
blue sky laws, which, if required, will be timely filed.
(h) Offering. In reliance on Purchaser' representations and warranties
in Section 4, the offer, sale and issuance of the Acquisition Securities in
conformity with the terms hereof and the issuance of the Warrant Shares will not
result in a violation of the requirements of Section 5 of the Securities Act or
the qualification or other applicable blue sky laws as such laws exist as of the
Closing.
(i) Capitalization. As of the Closing, Company's authorized capital
stock consists of 50,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock. As of the Closing, 30,768,500 shares of Common Stock are issued
and outstanding. All such issued and outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable. Company,
under its 1998 Stock Option Plan has reserved 1,000,000 shares of Common Stock
for issuance upon the exercise of options granted thereunder. Company has issued
and outstanding warrants to purchase 5,733,333 shares of Common Stock.
(j) Subsidiaries. Company Group owns no equity securities of any other
corporation, limited partnership or similar entity, other than the Subsidiaries
set forth on Exhibit E. Company Group is not a participant in any joint venture,
partnership or similar arrangement.
(k) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as specifically disclosed in the SEC
Reports, could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.
Neither Company nor any Subsidiary, nor any director or officer thereof, is or
has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty, except as specifically disclosed in the SEC Reports. There has
not been, and to the knowledge of Company, there is not pending or contemplated,
any investigation or inquiry by the SEC involving Company or any current or
former director or officer of Company. Company has not received any stop order
or other order suspending the effectiveness of any registration statement filed
by Company or any Subsidiary under the Exchange Act or the Securities Act.
(l) Liabilities. Company Group has no material liabilities and, to the
best of its knowledge, knows of no material contingent liabilities not disclosed
to Purchaser, except current liabilities incurred in the ordinary course of
business which have not been, either in any individual case or in the aggregate,
materially adverse.
(m) Agreements; Action.
(i) Except for agreements explicitly contemplated hereby, there
are no agreements, understandings or proposed transactions between Company and
any of its officers, directors, affiliates or any affiliate thereof.
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(ii) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
Company is a party or to its knowledge by which it is bound which may involve
(i) obligations (contingent or otherwise) of, or payments to, Company Group in
excess of Twenty-Five Thousand Dollars ($25,000) (other than obligations of, or
payments to, Company Group arising from purchase or sale agreements entered into
in the ordinary course of business), or (ii) the license of any patent,
copyright, trade secret or other proprietary right to or from Company Group
(other than licenses arising from the purchase of "off the shelf" or other
standard products), or (iii) indemnification by Company Group with respect to
infringements of proprietary rights (other than indemnification obligations
arising from purchase or sale agreements entered into in the ordinary course of
business).
(iii) Company Group has not (A) incurred any Indebtedness or any
other liabilities (other than trade obligations incurred in the ordinary course
of business) individually in excess of Twenty-Five Thousand Dollars ($25,000)
or, in the case of Indebtedness and/or liabilities individually less than
Twenty-Five Thousand Dollars ($25,000), in excess of Fifty Thousand Dollars
($50,000) in the aggregate, (B) made any loans or advances to any Person, other
than ordinary advances for travel expenses, or (C) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(iv) For the purposes of subsections (ii) and (iii) above, all
Indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same Person (including Persons Company
has reason to believe are Affiliates of Company) shall be aggregated for the
purpose of meeting the individual minimum dollar amounts of such subsections.
(n) Obligations to Related Parties. Company Group has no obligations
to its officers, directors, stockholders or employees other than for (i) payment
of salary for services rendered, (ii) reimbursement for reasonable expenses
incurred on Company Group's behalf and (iii) other standard employee benefits
made generally available to all employees (including stock option agreements
outstanding under any stock option plan approved by Company's Board of
Directors). None of Company Group's officers, directors or stockholders, or any
members of their immediate families, are indebted to Company Group or have any
direct or indirect ownership interest in any entity with which Company Group is
affiliated or with which Company Group has a business relationship, or any
entity which competes with Company Group, except that such officers, directors
and/or stockholders may own stock in publicly traded companies which may compete
with Company Group. No officer, director or stockholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with Company Group (other than such contracts as relate to any such
Person's ownership of Company's capital stock). Company Group is not a guarantor
or indemnitor of any liabilities of any Person.
(o) Title to Assets; Liens. Company Group has good and marketable
title to its assets, and good title to its leasehold estates, in each case
subject to no Lien or lease, other than (i) those resulting from taxes which
have not yet become delinquent, (ii) minor liens and encumbrances which do not
materially detract from the value of the property subject thereto or
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materially impair Company Group's operations, and (iii) those that have
otherwise arisen in the ordinary course of business. Company Group is in
compliance with all material terms of each lease to which it is a party or is
otherwise bound.
(p) Intellectual Property. Company Group owns or possesses sufficient
legal rights to all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes
(the "INTELLECTUAL PROPERTY") needed for its business as now conducted and as
presently proposed to be conducted, without any known infringement of the rights
of others. There are no outstanding options, licenses or agreements of any kind
relating to the foregoing, nor is Company Group bound by or a party to any
options, licenses or agreements of any kind with respect to the Intellectual
Property of any other Person other than such licenses or agreements arising from
the purchase of "off the shelf" or standard products. Company Group has not
received any communications alleging that it has violated or, by conducting its
business as presently proposed, would violate any of the Intellectual Property
of any other Person. None of Company's employees are obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to Company Group
or that would conflict with Company Group's business as presently proposed to be
conducted. Neither the execution nor delivery of this Agreement and the other
Transaction Documents, nor the carrying on of Company Group's business by
Company's employees, nor the conduct of Company Group's business as presently
proposed, will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any employee is now obligated. Company Group does not
believe it is or will be necessary to utilize any inventions, trade secrets or
proprietary information of any of its employees made prior to their employment
by Company, except for inventions, trade secrets or proprietary information that
they have assigned to Company.
(q) Employees. To the best of Company's knowledge after reasonable
inquiry, no employee of Company, nor any consultant with whom Company Group has
contracted, is in violation of any term of any employment contract, proprietary
information agreement or any other agreement relating to the right of any such
individual to be employed by, or to contract with, Company because of the nature
of the business to be conducted by Company Group; and to Company's knowledge the
continued employment by Company of its present employees, and the performance of
Company Group's contracts with its independent contractors, will not result in
any such violation. Company Group has not received any notice alleging that any
such violation has occurred. No employee of Company has been granted the right
to continued employment by Company Group or to any material compensation
following termination of employment with Company Group. Company is not aware
that any officer or key employee, or that any group of key employees, intends to
terminate their employment with Company, nor does Company have a present
intention to terminate the employment of any officer, key employee or group of
key employees. None of the Subsidiaries has any employees.
(r) SEC Reports; Financial Statements. Company has filed all SEC
Reports on a timely basis or has timely filed a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such
extension. Company has delivered to
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Purchaser true, correct and complete copies of all SEC Reports filed within the
ten (10) days preceding the date hereof. The SEC Reports incorporated herein by
reference include, without limitation, (i) Company's Annual Report on Form 10-K
filed on April 17, 2006, (ii) Company's Quarterly Reports on Form 10-Q filed on
May 15, 2006 and August 21, 2006 and (iii) any and all of Company' Current
Reports on Form 8-K filed since January 1, 2006. As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with GAAP, except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of Company
and the consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
All material agreements to which Company or any Subsidiary is a party or to
which the property or assets of Company or any Subsidiary are subject are
included as part of or specifically identified in the SEC Reports.
(s) Press Releases. The press releases disseminated by Company during
the twelve (12) months preceding the date of this Agreement, individually and
considered together, do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made and when made, not misleading.
(t) Material Changes. Since the date of the latest audited financial
statements included in Company's most recent Annual Report on Form 10-K, except
as specifically disclosed in the SEC Reports, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
have a Material Adverse Effect, (ii) Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses, and
other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the SEC, (iii) Company has not altered its critical accounting
policies or the identity of its auditors, (iv) Company has not declared or made
any dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company stock option
plans. Company does not have pending before the SEC any request for confidential
treatment of information or documents.
(u) Full Disclosure. No representation, warranty or other statement
made by Company in any written statement furnished to Purchaser contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained in such statements not misleading.
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3. COMPANY COVENANTS. For so long as any of the Securities are outstanding
Company shall deliver to Purchaser as soon as practicable after the end of each
calendar month, and in any event within twenty (20) days thereafter, an
unaudited balance sheet of Company as of the end of such month, cash flow
statements and an unaudited statement of operations of Company for the portion
of the fiscal year ended with such month prepared in accordance with GAAP and
certified by Company's chief executive officer, subject, however, to the
exclusion of footnotes and to normal year-end audit adjustments.
4. PURCHASER REPRESENTATIONS AND WARRANTIES. Purchaser represents and
warrants to Company as of the time of issuance of the Acquisition Securities
purchased by Purchaser as follows:
(a) Investment Intent; Authority. This Agreement is made with
Purchaser in reliance upon Purchaser's representation to Company, evidenced by
Purchaser's execution of this Agreement, that Purchaser is acquiring the
Acquisition Securities for investment for Purchaser's own account and not with a
view to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act. Purchaser has the full right,
power, authority and capacity to enter into and perform this Agreement and this
Agreement will constitute a valid and binding obligation upon Purchaser, except
as the same may be limited by bankruptcy, insolvency, moratorium, and other laws
of general application affecting the enforcement of creditors' rights.
(b) Shares Not Registered. Purchaser understands and acknowledges that
the offering of the Acquisition Securities pursuant to this Agreement will not
be registered under the Securities Act on the grounds that the offering and sale
of securities contemplated by this Agreement are exempt from registration under
the Securities Act, and that Company's reliance upon such exemptions is
predicated upon Purchaser's representations set forth in this Agreement.
Purchaser acknowledges and understands that resale of the Securities may be
restricted indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
(c) No Transfer. Purchaser covenants not to dispose of any of the
Securities other than in conjunction with an effective registration statement
under the Securities Act or in compliance with Rule 144 promulgated under the
Securities Act or pursuant to another exemption from registration or to an
entity affiliated with Purchaser and other than in compliance with the
applicable securities regulations laws of any state.
(d) Knowledge and Experience. Purchaser (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of Purchaser's prospective investment in the Acquisition
Securities, (ii) has the ability to bear the economic risks of Purchaser's
prospective investment, and (iii) has not been offered any of the Acquisition
Securities by any form of advertisement, article, notice or other communication
published in any newspaper, magazine, or similar media or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any such media.
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5. PURCHASER CLOSING CONDITIONS. Purchaser's obligation to purchase the
Acquisition Securities at the Closing is subject to the fulfillment as of the
Closing of the following conditions, any of which Purchaser may waive with
respect to itself:
(a) Representations and Warranties Correct. Company's representations
and warranties in Section 2 hereof shall be true and correct in all material
respects as of the Closing.
(b) Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by Company on or prior to the Closing shall have
been performed or complied with.
(c) Secured Guaranty. United Moneycorp, Inc. ("UMY") shall have
executed and delivered the Secured Guaranty attached hereto as Exhibit G (the
"GUARANTY"). UMY's representations and warranties in the Guaranty shall be true
and correct in all material respects as of the Closing. All covenants,
agreements and conditions contained in the Guaranty to be performed by UMY on or
prior to the Closing shall have been performed or complied with.
(d) Good Standing Certificates. Certificates (each dated not more than
10 days prior to the Closing), of the Secretary of State of the State of
Delaware as to the good standing of Company in Delaware and the Secretary of
State of Texas as to the good standing of the Company and each of its
Subsidiaries in Texas.
(e) Secretary's Certificates. A certificate of the secretary of each
of Company and UMY, each dated as of the Closing Date, certifying as to (i) the
incumbency of the officers of Company and UMY who are executing this Agreement
or any of the Transaction Documents to which either Company or UMY is a party,
(ii) the certificate of incorporation and bylaws of each of Company and UMY and
(iii) the resolutions duly adopted by the board of directors of Company and UMY
authorizing the execution, delivery and performance by Company and UMY of each
Transaction Document to which Company or UMY is a party and the consummation of
the transactions contemplated by the Transaction Documents, as in effect as of
the Closing, certified by an officer of Company and UMY.
6. COMPANY CLOSING CONDITIONS. Company's obligation to sell (and issue) the
Acquisition Securities at the Closing is, at Company's option, subject to the
fulfillment as of the Closing of the following condition: Purchaser'
representations and warranties in Section 4 hereof shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects as of the Closing.
7. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; COMPLIANCE WITH
SECURITIES ACT.
(a) Restrictions on Transferability. None of the Securities shall be
sold, assigned, transferred or pledged except upon the conditions specified in
this section, which conditions are intended to ensure compliance with the
Securities Act. Each Purchaser will cause any proposed purchaser, assignee,
transferee, or pledgee of any of the Securities to agree to take and hold such
Securities subject to the provisions and upon the conditions specified in this
section.
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(b) Restrictive Legend. Each certificate representing (i) the
Securities and (ii) any other securities issued in respect of the Securities
upon any stock split, stock dividend, recapitalization, merger, consolidation or
similar event (collectively the "RESTRICTED SECURITIES"), shall (unless
otherwise permitted by the provisions of this section) be stamped or otherwise
imprinted with a legend required under applicable state securities laws and a
legend substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES, THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SUCH ACT.
Purchaser consents to Company making a notation on its records and giving
instructions to any transfer agent of the Securities in order to implement the
restrictions on transfer established in this section.
(c) Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 7. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than a
transfer not involving a change in beneficial ownership), unless there is in
effect a registration statement under the Securities Act covering the proposed
transfer or unless the Restricted Securities may be transferred pursuant to Rule
144 or Rule 144A under the Securities Act, the holder thereof shall give written
notice to Company of such holder's intention to effect such transfer, manner and
circumstances of the proposed transfer, sale, assignment or pledge in sufficient
detail, and shall be accompanied, at such holder's expense by either (i) an
opinion of legal counsel to the effect that the proposed transfer of the
Restricted Securities may be effected without registration under the Securities
Act, or (ii) a "no action" letter from the SEC to the effect that the transfer
of such Restricted Securities without registration will not result in a
recommendation by the SEC staff that action be taken with respect thereto,
whereupon the holder of such Restricted Securities shall be entitled to transfer
such Restricted Securities in accordance with the terms of the notice delivered
by the holder to Company. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144, the appropriate restrictive legend set forth in this
Section 7, except that such certificate shall not bear such restrictive legend
if in the opinion of counsel for such holder and Company such legend is not
required in order to establish compliance with any provision of the Securities
Act.
8. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
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"ACTION" means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened in writing against or affecting Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency, regulatory authority (federal, state, county, local or
foreign), stock market, stock exchange or trading facility.
"AFFILIATE" means, with respect to any Person, any Person that owns or
controls directly or indirectly such Person, any Person that controls or is
controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, and partners.
"COMPANY GROUP" means each of Company and its Subsidiaries.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP": generally accepted accounting principles as in effect from time to
time.
"INDEBTEDNESS" means any liability, whether or not contingent, (i) with
respect to borrowed money, or evidenced by bonds, notes, debentures or similar
instruments, (ii) representing the balance deferred and unpaid of the purchase
price of any property or services (except such balance that constitutes an
account payable to a trade creditor created or incurred in the ordinary course
of business), (iii) as lessee under leases that are capital leases for GAAP
purposes, (iv) consisting of reimbursement obligations with respect to surety
bonds, letters of credit, banker's acceptances, drafts or similar documents or
instruments issued for the liable Person's account, and (v) as a guarantor for
any liability described in clause (i), (ii), (iii) or (iv) of this definition,
including any guarantor arising from the pledge of any property as security for
any liability of a third party described in clause (i), (ii), (iii) or (iv) of
this definition.
"LIENS" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, security interest, charge, claim
or other encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any agreement to give or refrain from giving a lien,
mortgage, pledge, hypothecation, assignment, deposit arrangement, security
interest, charge, claim or other encumbrance of any kind.
"MATERIAL ADVERSE EFFECT" means any of (a) an adverse effect on the
legality, validity or enforceability of any Transaction Document, (b) a material
and adverse effect on the results of operations, assets, prospects, business or
condition (financial or otherwise) of Company and the Subsidiaries, taken as a
whole, or (c) a material and adverse impairment to Company's ability to perform,
on a timely basis, its obligations under any Transaction Document.
"PERSON" means any individual, sole proprietorship, corporation, limited
liability company, limited liability partnership, partnership, joint venture,
trust, unincorporated organization, estate or any other entity or any
governmental agency.
"SEC" means the Securities and Exchange Commission.
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"SEC REPORTS" means all reports required to be filed by Company under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the twelve (12) months preceding the date hereof (or such
shorter period as Company was required by law to file such reports).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY" means any corporation, company or partnership in which (i) any
general partnership interest or (ii) more than 50% of the stock or other units
of ownership which by the terms thereof has the ordinary voting power to elect
the board of directors, managers or trustees of the entity, at the time as of
which any determination is being made, is owned by Company, either directly or
through an Affiliate of Company.
"TRANSACTION DOCUMENTS" means the Agreement, the Note, the Warrant, the
Security Agreement, the Deed of Trust, the Guaranty and all documents needed or
appropriate to perfect or give notice of Purchaser' security interest in the
Collateral.
Capitalized terms defined in the other Transaction Documents, for the purposes
of this Agreement, shall have the meanings assigned to them in such other
Transaction Documents.
9. MISCELLANEOUS.
(a) Entire Agreement. This Agreement together with the other
Transaction Documents constitute the full and entire understanding and agreement
between the parties with regard to the subject matters hereof and thereof.
(b) Waivers and Amendments. No provision of this Agreement or any
other Transaction Document may be amended, waived or modified other than by a
document signed by Company and Purchaser (as of the effective date of such
action).
(c) Governing Law; Venue; Waiver of Jury Trial. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Illinois, without regard to the conflicts of law provisions. Company and
Purchaser each hereby submit to the jurisdiction of the state and Federal courts
located in the County of Xxxx, State of Illinois, or, at Purchaser's sole
option, such other venues and courts which have appropriate jurisdiction over
the matter in controversy with respect to all actions relating to the
Transaction Documents. Company waives any objection of forum non conveniens and
venue. Company further waives personal service of any process upon it, and
consents that all such service of process be made in the manner set forth in
Section 9(d) hereof for the giving of notice. Company further waives any right
it may otherwise have to collaterally attack any judgment entered against it.
Company and Purchaser each hereby waive their respective rights to a jury trial
of any claim or cause of action based upon or arising out of any of the
Transaction Documents or any of the transactions contemplated therein, including
contract claims, tort claims, breach of duty claims, and all other common law or
statutory claims. Each party recognizes and agrees that the foregoing waiver
constitutes a material inducement for it to enter into the Transaction
Documents. Each party represents and warrants that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel.
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(d) Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or by recognized overnight courier or personal delivery or sent by
facsimile, addressed:
If to Company:
United Medicorp, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with copy, which shall not constitute notice to Company, to:
Xxxxx & Associates, P.C.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
If to Purchaser:
Xxxxxxx Financial Group, L.L.C.
000 X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
with copy, which shall not constitute notice to Purchaser, to:
DLA Piper US LLP
1999 Avenue of the Stars, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
(e) A notice shall be deemed effectively given, (i) upon personal
delivery to the party to be notified; (ii) when sent by confirmed facsimile if
sent during normal business hours of the recipient, and if not, then on the next
business day; (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.
(f) Brokers or Finders. Each party represents and warrants to the
others that such party is not and will not be obligated for any broker's or
finder's fee or commission (collectively "BROKER FEES") in connection with the
transactions described herein. Purchaser
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agrees to indemnify and to hold Company harmless from any liability for any
Broker Fee (and the cost of defending against such liability or asserted
liability) for which Purchaser or any of Purchaser's directors, officers,
employees, agents or affiliates is responsible. Company agrees to indemnify and
to hold Purchaser harmless from any liability for any Broker Fee (and the cost
of defending against such liability or asserted liability) for which such
Company or any of its directors, officers, employees, agents or affiliates is
responsible.
(g) Expenses. Company shall pay all costs and expenses that Company
and Purchaser incur with respect to the negotiation, execution, delivery and
performance of this Agreement and the other Transaction Documents. Company's
total liability for costs and expenses of Purchaser incurred pursuant to the
Transaction Documents shall be $25,000 which shall be paid by issuance by
Company to Purchaser of One Million Nine Hundred Twenty Three Thousand One
Hundred (1,923,100) shares of Common Stock to be issued to Purchaser at the
Closing (the "COMMON SHARES").
(h) Validity. If any provision of this Agreement is judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(i) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
(j) Joint Preparation. Company and Purchaser acknowledge that this
Agreement was jointly prepared by them, by and through their legal counsel, and
any uncertainty or ambiguity existing herein shall not be interpreted against
any of Company or Purchaser, but otherwise according to the application of the
rules on interpretation of contracts.
(k) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first written above.
COMPANY
UNITED MEDICORP, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx
Chairman and Chief Executive Officer
PURCHASER
XXXXXXX FINANCIAL GROUP, L.L.C.
an Illinois limited liability company
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive
Officer
EXHIBIT A
FORM OF SECURITY AGREEMENT
EXHIBIT B
FORM OF SECURED PROMISSORY NOTE
EXHIBIT C
FORM OF WARRANT
EXHIBIT D
SCHEDULE OF EXCEPTIONS
In connection with the Note and Warrant Purchase Agreement, dated as of
November 1, 2006, by and between UNITED MEDICORP, INC., a Delaware corporation
("COMPANY") and XXXXXXX FINANCIAL GROUP, L.L.C. ("PURCHASER") (the "AGREEMENT"),
Company hereby delivers this Schedule of Exceptions to Company's representations
and warranties given in the Agreement. Capitalized terms used but not defined
herein shall have the same meanings given them in the Agreement.
SCHEDULE 2(L) - LIABILITIES
The Company has previously provided Purchaser a copy of the Asset Purchase
Agreement between the Company and Incipient Healthcare Solutions, Inc. ("IHS")
dated effective August 1, 2006 (the "APA"). The APA includes the assumption by
the Company of a Note Payable to State National Bank with a principal balance of
$130,000 (plus interest) at 9/30/2006 (the "STATE NATIONAL BANK NOTE"), plus a
commitment to sign an additional non-interest bearing note payable to IHS and
its creditors in the amount of $150,000 (the "IHS NOTE") upon approval of the
IHS Plan of Reorganization by the U.S. Bankruptcy Court (the "BANKRUPTCY PLAN").
The Bankruptcy Plan has not been approved as of Closing and the Company is not
liable for the State National Bank Note or the IHS Note.
SCHEDULE 2(M) - AGREEMENT; ACTION
- The Company has an agreement to issue stock purchase warrants to Xxxxx
X. Xxxxxx, CEO, and Xxxxxx X. Xxxxx, VP Operations, for 1,300,000
shares and 700,000 shares respectively, in consideration for these
officers' agreement to defer three paychecks due on 9/15/06, 9/30/06,
and 10/15/06.
- The Company sold a 2002 Toyota Camry company car during the month of
October, for a price of $7,000.
- The Company has also incurred indebtedness to Xxxxxxxx Roofing Company
in the amount of about $40,000 for replacement of the roof on the
Company's building located at 000 X. Xxxxxx Xxxxxx in Pampa, Texas.
The Company will pay for this indebtedness by refinancing its existing
mortgage on the building with National Bank of Commerce in Pampa
("NBC"). The principal balance on the new mortgage will be $50,000.
The Company has provided draft copies of the documents related to the
new mortgage with NBC to Purchaser.
- The Company has entered into contracts with Texas Tech University
Health Sciences Center ("TTUHSC") and Ravinia Funding LLC et al
("RAVINIA") whereby the Company's subsidiary United Medcash, LLC will
purchase tranches of bad debt receivables offered for sale each month
by TTUHSC, and will finance the purchase price of such tranches via
loans from Ravinia of up to 80% of the purchase price of each
tranche. The Company has provided copies of the agreements with TTUHSC
and Ravinia to Purchaser.
SCHEDULE 2(N) - OBLIGATIONS TO RELATED PARTIES
The Company has indemnified each member of its Board of Directors for any
liabilities they may incur in connection with their services to UMC.
SCHEDULE 2(O) - TITLE TO ASSETS; LIENS
- The Company has experienced significant operating losses during 2006
which have reduced working capital to the point where a substantial
number and amount of accounts payable balances are past due. These
past due balances include scheduled payments to lessors under the
Company's capitalized lease obligations, and other suppliers.
Therefore, the Company is not in compliance with the terms of several
lease agreements and other vendor agreements. The Company's inability
to pay its accounts payable and lease obligations in a timely manner
could materially impair the Company's ability to conduct operations,
and could also void certain lease agreements whereby the Company would
otherwise obtain clear title to essential equipment needed to sustain
operations.
- The Company has committed to issue a Deed of Trust to National Bank of
Commerce in connection with the mortgage described above.
SCHEDULE 2(T) - MATERIAL CHANGES
The Company has entered into the agreements with TTUHSC and Ravinia as described
in Schedule 2(m) above. In addition, the Company has generated about $625K of
operating losses for the year to date through September 30, 2006. These losses
have had a Material Adverse Effect on the Company by reducing the Company's
working capital below the level necessary to fund operating needs.
EXHIBIT E
SUBSIDIARIES
United Moneycorp, Inc., a Texas corporation
United Medcash, LLC, a Texas limited liability company
EXHIBIT F
SECURED GUARANTY
