Exhibit 9.1
MCBB 111302
FIRST AMENDMENT TO THE
AMENDED AND RESTATED
ESCROW AGREEMENT
This First Amendment to the Amended and Restated Escrow Agreement (this
"Amendment") dated November ___, 2002, is by and among Xxxxxx Capital LLC, a
Georgia limited liability company ("Xxxxxx Capital"); Park City Group, Inc., a
Nevada corporation ("Parent PCG", successor by merger of Fields Technologies,
Inc., which was formerly known as AmeriNet Xxxxx.xxx, Inc.) and First American
Title Insurance Agency, Inc., a Utah corporation ("Escrow Agent").
1. RECITALS
A. Park City Group, Inc., a Delaware corporation ("Operating PCG"), the
majority of the stock of which was on April 5, 2001 and January 1, 2001 owned by
Riverview Financial Corp. ("Riverview"), executed and delivered its Secured
Promissory Note dated April 5, 2001 and effective January 1, 2001, in the
principal amount of $2,750,000.00, payable to the order of the Xxxxxx Capital
(the "Note"), pursuant to that certain Master Agreement of even date (the
"Master Agreement") among Xxxxxx Capital, Xxxxxx Fields, LLC, a Utah limited
liability company ("Xxxxxx Fields"), Riverview, Operating PCG, and Xxxxxxx X.
Xxxxxx (collectively, and together with Xxxxxxx X. Xxxxxxx, the "Fields Group").
Capitalized terms used but not defined in this Amendment shall have the meanings
set forth in the Master Agreement or in the documents listed in Article
1.1(a)(2) and Exhibit A of the Master Agreement (all of such agreements,
together with the Amended Escrow Agreement, and the Forbearance Agreements among
certain of the parties to the Master Agreement, as amended, collectively the
"Transaction Documents").
B. In connection with the execution and delivery of the Transaction
Documents, Riverview granted to Xxxxxx Capital, pursuant to the terms of that
certain Stock Pledge and Security Agreement of an even date (the "Security
Agreement," which is also a Transaction Document), among other things, an
additional security interest in a portion of the issued and outstanding shares
of Operating PCG and of the equity and voting interest of Operating PCG, as
defined in the Security Agreement (the "Additional Collateral").
C. Pursuant to a certain Escrow Agreement executed by Xxxxxx Capital,
Riverview and Escrow Agent (as defined therein) dated April 5, 2001 (the
"Original Escrow Agreement"), the Additional Collateral and the Stock Power
relating to the same were delivered to the Escrow Agent to be held in trust and
delivered to Xxxxxx Capital upon the occurrence of an Event of Default under the
Transaction Documents pursuant to the terms of the Original Escrow Agreement or
to be returned to Riverview upon payment in full of the Note and the
satisfaction by the Fields Group of all of their obligations under the
Transaction Documents.
D. In 2001, Riverview assigned or otherwise transferred the pledged
shares of Operating PCG common stock to AmeriNet Xxxxx.xxx, Inc. ("AmeriNet") in
exchange for shares of AmeriNet common stock, $0.01 par value, and AmeriNet
assumed the liabilities, obligations and responsibilities of Riverview under the
Security Agreement pursuant to a certain Assumption Agreement dated June 13,
2001, between Riverview and AmeriNet, and in connection therewith, on June 13,
2001, Riverview, AmeriNet, Xxxxxx Capital, and First American Title Insurance
Agency Company, Inc. entered into a certain Amended and Restated Escrow
Agreement (the "Amended Escrow Agreement").
E. On _______________, __________, AmeriNet changed its name to Fields
Technologies, Inc.
F. On June 5, 2002, Fields Technologies, Inc. merged with and into
Parent PCG and by virtue thereof, all of the rights and obligations of Fields
Technologies, Inc. became vested in Parent PCG, including, inter alia, the
obligations under the Transaction Documents, the ownership of the Additional
Collateral, and the continuing grant of pledges and security interests therein
pursuant to the Security Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the forgoing recitals and the
mutual promises and benefits set forth herein, the parties hereby amend the
Amended Escrow Agreement as follows:
Section 1 is hereby amended and restated in its entirety as follows:
1. Documents in Escrow
The Escrow Agent continues to hold the following documents pursuant to
the Amended Escrow Agreement (collectively, the "Documents"):
(a) Certificate No. 46 representing 4,339,236 shares of the common
stock of Operating PCG issued in the name of AmeriNet, which
shares Parent PCG represents and warrants are owned by it,
continue to be issued and outstanding and represented by
Certificate No. 46, have not been replaced by another stock
certificate, and constitute the portion of the issued and
outstanding shares of Operating PCG and of the equity and
interest of Operating PCG required as Additional Collateral
under the Security Agreement (the "Shares"); and
(b) Stock Power pertaining to the Shares executed by AmeriNet in
favor of Xxxxxx Capital, which Stock Power Parent PCG
represents and warrants continues to be a valid Stock Power
with respect to the Shares as fully and completely as though
Parent PCG was the signatory thereof.
Section 4 is hereby amended and restated in its entirety as follows:
4. Instructions in the Event No Direction is Given.
If the Escrow Agent does not receive directions from Xxxxxx Capital to deliver
the Documents according to the instructions contained in this Agreement by
December 31, 2003, it is hereby directed, upon request by Parent PCG, to deliver
the documents to Parent PCG. In no event may the Escrow Agent release the
Documents to any party except according to this Agreement.
Except for the specimen signatures provided in the Amended Agreement as
indicated below, Section 5 is hereby amended and restated in its entirety as
follows:
5. Authorized Signatories
The Escrow Agent may rely upon, and shall be protected in acting or refraining
from acting upon, any written notice or instruction furnished to it hereunder
and believed by it to be genuine and to have been signed (i) in the case of
Xxxxxx Capital, by Xxxxxx Capital, Xxxxxxx X. Xxxxxx, or by the law firm of
Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLC; (ii) in the case of Parent PCG, by Parent
PCG or Xxxxxxx X. Xxxxxx. The Escrow Agent may rely on the specimen signatures
of Xxxxxx Capital, Xxxxxxx X. Xxxxxx, Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLC, and
Xxxxxxx X. Xxxxxx provided in the Original Escrow Agreement or Amended Escrow
Agreement. Appearing below are the specimen signatures of Parent PCG:
2.1 For Xxxxxx Capital:
a. /s/ (see Amended Escrow Agreement)
Xxxxxxxxx X. Xxxxxx
Or
b. /s/ (see Amended Escrow Agreement)
Xxxxxxx X. Xxxxxx
Or
x. XXXXXXX XXXXXX XXXXXXXX & XXXXXX LLC
By: /s/ (see Amended Escrow Agreement)
Xxxxx X. Xxxxxxx
Or
By: /s/ (see Amended Escrow Agreement)
Xxxx X. Xxxxxx
2.2 For Parent PCG:
a. ____________________________________
Name: Xxxxxxx X. Xxxxxx
Or
b. ____________________________________ Name:
________________________
Xxxxxx Capital and Parent PCG may each add or remove signatories for itself by
filing with the Escrow Agent an appropriate certificate of change in signatories
signed by one of its authorized signatories.
6. Duties of the Escrow Agent; Fees
Section 6.1 is hereby amended and restated in its entirety as follows:
6.1 This Amendment shall constitutes Parent PCG's acknowledgment of
continued pledge of the Shares and the continued direction and grant of full
authority to the Escrow Agent to perform its obligations under the Amended
Escrow Agreement to the fullest extent set forth therein with respect to the
Documents for the benefit of Xxxxxx Capital without proof of occurrence of an
Event of Default under the Transaction Documents.
All other provisions of Section 6 remain unchanged.
Section 7 is hereby amended and restated in its entirety as follows:
7. Notice
All notices, consents or other communications under this Amendment and the
Amended Escrow Agreement must be in writing and must be sent to all of the
parties at their respective addresses or fax numbers set forth above below, or,
in the event of a change in any address or fax number, to such other address or
fax number as to which notice of the change is given.
If to Xxxxxx Capital: Xxxxxx Capital, LLC
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
And with a copy to: Xxxxxxx X. Xxxxxx, Esq.
000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
And with a copy to: Xxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLC
Third Floor Xxxxxxxx Building
00 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Parent PCG Riverview: Xxxxxxx X. Xxxxxx
Park City Group, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxx, Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: __________________________
__________________________
__________________________
Phone: __________________
Fax: __________________
If to the Escrow Agent: Xxxx X. Xxxxxxx
First American Title Insurance Agency
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
All deliveries of Documents hereunder, and any notices, consents or other
communications sent by means other than facsimile, must be sent via certified
U.S. mail, first class, prepaid, or private overnight courier (e.g., Federal
Express, DHL). Notice will be deemed given upon receipt.
Section 8 is hereby amended and restated in its entirety as follows:
8. Exhibits Modified; Amendment; Other Provisions of Amended Escrow
Agreement Unchanged
Exhibit A and Exhibit B are modified and replaced in their entirety with the
attached Exhibits to reflect changes in wording necessary due to the Amended
Escrow Agreement and this Amendment. Except for the substitution of "Parent PCG"
as pledgor for "Amerinet" as pledgor where appropriate in the remaining sections
of the Amended Escrow Agreement, all provisions of the Amended Escrow Agreement
not specifically and expressly amended hereby, shall remain in full force and
effect. The Amended Escrow Agreement, as modified by this Amendment may not be
further amended except by an instrument in writing signed by all of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the dates set forth below, to be effective for all purposes as of the date first
written above.
Escrow Agent
XXXXXX CAPITAL, LLC,
a Georgia limited liability company First American Title Insurance Agency, Inc.
a Utah corporation
By: _________________________ By: ____________________________
Its: _________________________ Its: ____________________________
Date: _________________________ Date: ____________________________
Park City Group, Inc.,
a Nevada corporation (successor by
merger of Fields Technologies, Inc.
(f/k/a AmeriNet Xxxxx.xxx, Inc.))
By: _________________________
Its: _________________________
Date: _________________________
2. EXHIBIT A
3. NOTICE OF DEFAULT
DATE: _____________, 20____
TO: ________________________________ [ESCROW AGENT]
________________________________
________________________________
Attn: ___________________________
YOU ARE HEREBY NOTIFIED of the occurrence of an Event of Default under the
Transaction Documents dated April 5, 2001 and effective January 1, 2001.
Pursuant to Article 3.1 of the Amended Escrow Agreement dated June 13, 2001, as
amended, you are hereby directed to immediately deliver, via hand delivery or
Federal Express, as appropriate, the following documents:
(a) Certificate No. [s] ______ representing ______ shares of the common
stock of Park City Group, Inc., a Delaware corporation issued in the
name of _________________ (the "Shares"); and
(b) Stock Power pertaining to the Shares executed in blank form;
to Xxxxxx Capital or its designee at the following address:
_______________________________
_______________________________
_______________________________
_______________________________
Attn: __________________________
BY XXXXXX CAPITAL, LLC:
_________________________________
By: ___________________________
4. Certificate of Delivery
I hereby certify that on this ____________, 20____, I caused the
foregoing NOTICE OF DEFAULT to be delivered, via hand delivery/Federal Express,
to the following:
___________________ [Escrow Agent]
___________________
___________________
Attn: ______________
Xxxxxx Capital, LLC
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Esq.
000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLC
Third Floor Xxxxxxxx Building
00 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxx X. Xxxxxx
________________________
________________________
_________________________
_________________________
_________________________
_________________________
5. EXHIBIT B
6. NOTICE OF SATISFACTION OF OBLIGATIONS
DATE: _____________, 20____
TO: ________________________________ [ESCROW AGENT]
________________________________
________________________________
Attn: ___________________________
YOU ARE HEREBY NOTIFIED of the Satisfaction of Obligations under the Transaction
Documents dated April 5, 2001 and effective January 1, 2001.
Pursuant to Article 3.2 of the Amended and Restated Escrow Agreement dated June
13, 2001, as amended, you are hereby directed to immediately deliver, via hand
delivery or Federal Express, as directed by Park City Group, Inc., a Nevada
corporation ("Parent PCG"), the following documents:
(c) Certificate No. [s] ______ representing ______ shares of the common
stock of Park City Group, Inc., a Delaware corporation issued in the
name of ___________________________ (the "Shares"); and
(d) Stock Power pertaining to the Shares executed in blank;
to Parent PCG or its designee at such address as may be separately provided to
you by Parent PCG.
BY XXXXXX CAPITAL, LLC:
_________________________________
By: ___________________________
7. Certificate of Delivery
I hereby certify that on this ____________, 20____, I caused the
foregoing NOTICE OF SATISFACTION OF OBLIGATIONS to be delivered, via hand
delivery/Federal Express, to the following:
___________________ [Escrow Agent]
___________________
___________________
Attn: ______________
Xxxxxx Capital, LLC
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Esq.
000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLC
Third Floor Xxxxxxxx Building
00 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxx X. Xxxxxx
________________________
________________________
________________________
________________________
________________________
FIFTH AMENDMENT TO
FORBEARANCE AGREEMENT
This Fifth Amendment to Forbearance Agreement (this "Fifth Amendment")
dated effective as of November ____, 2002, is entered into by and among Xxxxxx
Capital, LLC, a Georgia limited liability company ("Xxxxxx"), Park City Group,
Inc., a Delaware corporation ("Operating PCG"), Xxxxxxx X. Xxxxxx, a Utah
resident ("Fields"), Riverview Financial Corp., a California corporation
("Riverview"), Xxxxxxx X. Xxxxxxx, a Utah resident ("Xxxxxxx"), Fresh Market
Manager, LLC (formerly known as Xxxxxx Fields, LLC), a Utah limited liability
company ("FMM"), and Park City Group, Inc. (formerly known as Fields
Technologies, Inc. and before that known as AmeriNet Xxxxx.xxx, Inc.), a Nevada
corporation ("Parent PCG").
RECITALS
A. Operating PCG is the maker of a certain Secured Promissory Note (the
"Note") and each of the parties is party to one or more of certain contracts and
agreements, and is subject to certain obligations, arising under and relating to
the Note and a certain Master Agreement dated April 5, 2001 and effective as of
January 1, 2001, as modified by a certain Assignment Agreement whereby certain
rights and obligations of Riverview were assumed by and assigned to Parent PCG's
predecessor, Fields Technologies, Inc. (then known as XxxxxXxx.xxx, Inc.) as of
June 13, 2001 (the "Assumption"), all of which agreements were entered into
among certain of the parties hereto in varying combinations, all relating to the
"Transaction" defined in the Master Agreement (with the documents related to the
Transaction, the Note, the related security agreement and guaranties, or
referred to or contemplated in the Master Agreement and/or the Assumption
Agreement, together with the Master Agreement, the Note, the security agreements
and guaranties, the Assumption Agreement, and this and all previous Forbearance
Agreements, referred to herein as the "Transaction and Assumption Documents").
B. In connection with the Transaction and the Assumption, Riverview,
Fields, Dunlavy, FMM, and Parent PCG (collectively, the "Guarantors"), inter
alia, guaranteed the obligations of Operating PCG under the Note, and Riverview,
Fields, FMM, and Parent PCG pledged certain assets to secure the obligations
under the Note and the Guaranty, including a portion of the Operating PCG common
stock, the FMM membership interests, and certain real estate and other assets
(the Operating PCG stock pledges, the FMM membership interest pledge, and the
real estate and other collateral interests and all related documentation
collectively referred to herein as the "Security Documents").
C. Effective as of December 14, 2001, the parties hereto entered into a
certain Forbearance Agreement in which the parties made certain agreements in
exchange for Xxxxxx Capital's agreement to forbear from the exercise of certain
remedies under the Transaction and Assumption Documents and the guaranties and
Security Documents (the "Forbearance").
D. Effective as of June 7, 2002, the parties hereto entered into a
certain Amendment to Forbearance Agreement in which the parties made certain
agreements in exchange for Xxxxxx Capital's agreement to forbear from the
exercise of certain remedies under the Transaction and Assumption Documents and
the guaranties and Security Documents (the "Amended Forbearance").
E. Effective as of July 31, 2002, the parties hereto entered into a
certain Second Amendment to Forbearance Agreement in which Xxxxxx Capital agreed
to forbear for a limited time from the exercise of certain remedies under the
Transaction and Assumption Documents and the guaranties and Security Documents
(the "Second Amended Forbearance").
F. Effective on June 5, 2002, Fields Technologies, Inc. merged with and
into Park City Group, Inc., a Nevada corporation, thereby effecting a change of
name and state of incorporation, with all of the obligations of Fields
Technologies, Inc. under the Transaction and Assumption Documents becoming the
obligations of Parent PCG (the "Merger").
G. Effective as of August 16, 2002, the parties hereto entered into a
certain Third Amendment to Forbearance Agreement in which Xxxxxx Capital agreed
to forbear for a limited time from the exercise of certain remedies under the
Transaction and Assumption Documents and the guaranties and Security Documents
(the "Third Amended Forbearance")
H. Effective as of October 1, 2002, the parties hereto entered into a
certain Fourth Amendment to Forbearance Agreement in which Xxxxxx Capital agreed
to forbear for a limited time from the exercise of certain remedies under the
Transaction and Assumption Documents and the guaranties and Security Documents
(the "Fourth Amended Forbearance").
I. Operating PCG failed to make the principal and interest installments
due on September 30, 2002 and October 31, 2002 under the Note and the Third
Amended Forbearance and the period of forbearance under the Fourth Amended
Forbearance has expired. Operating PCG and the Guarantors have asked that Xxxxxx
Capital forbear for a period of time in the enforcement of its rights to
accelerate the Note, proceed against the collateral under the Security
Documents, and pursue collection under the Note and the guaranties that arose
from the failure to make timely payment. Provided the terms and conditions of
this Fifth Amendment and the other terms of the Transaction and Assumption
Documents, guaranties and Security Documents and the Forbearance a previously
amended are met on a timely basis, Xxxxxx Capital shall agree to forbear
enforcement of such rights with respect to the payments not timely made. Until
executed and delivered by all parties hereto, this Fifth Amendment shall be of
no force or effect. In the event any of the terms and conditions contained
herein are not met in a timely manner at any time during the term of this Fifth
Amendment, Xxxxxx Capital shall have the right to pursue any or all of its
rights and remedies under this or any the previous Forbearance Agreements, the
Note, the guaranties, the Security Documents or any of the other Transaction and
Assumption Documents.
AGREEMENT
In consideration of the promises and conditions contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby mutually acknowledged, and to induce Xxxxxx Capital to forbear from
pursuing collection and other remedies granted to it, Operating PCG and the
Guarantors agree to the following terms:
8. Payments of Principal and Interest Due on the Note: Operating PCG shall
pay the remaining principal under the Note plus interest accrued but
unpaid as of the date hereof and all interest accruing hereafter at the
per annum default rate of sixteen percent (16%) in accordance with the
following schedule (the "Formula Amount" is defined below the schedule
of payments):
Date Due
On or before: Principal Amount Interest Amount
------------- ---------------- ---------------
Date of execution hereof -0- All accrued but unpaid interest
November 30, 2002 -0- All accrued but unpaid interest
December 31, 2002 $ 200,000.00 All accrued but unpaid interest
January 31, 2003 Greater of: $50,000.00 or the Formula Amount All accrued but unpaid interest
February 28, 2003 Greater of: $50,000.00 or the Formula Amount All accrued but unpaid interest
March 31, 2003 Greater of: $50,000.00or the Formula Amount All accrued but unpaid interest
April 30, 2003 Greater of: $50,000.00or the Formula Amount All accrued but unpaid interest
May 31, 2003 Greater of: $50,000.00or the Formula Amount All accrued but unpaid interest
June 30, 2003 Greater of: $50,000.00or the Formula Amount All accrued but unpaid interest
July 1, 2003 One-Third of then remaining principal All accrued but unpaid interest
August 1, 2003 One-Half of then remaining principal All accrued but unpaid interest
September 1, 2003 All remaining unpaid principal All accrued but unpaid interest
Total principal $1,325,000.00
All accrued but unpaid Forbearance Fees (as defined below) shall be due and
payable in three installments of one-third each on July 1, 2003, August 1, 2003,
and September 1, 2003 or at the time of any earlier prepayment in full of the
remaining principal due under the Note. The "Formula Amount", which will be the
amount of principal due for each respective month set forth above beginning
January, 2003, shall equal fifty percent (50%) of the collective cash receipts
of Operating PCG and FMM for such month in excess of $400,000.00; provided that
for each month beginning in February, 2003, any amount by which the cash
receipts for the prior month(s) beginning with January, 2003 were less than
$400,000, that short fall shall be "carried forward" for future months to offset
against cash receipts for that month for purposes of this calculation such that
the calculation in any given month shall give effect to the cumulative effect of
prior shortfalls in calculations after January, 2003. Cash receipts for purposes
of this formula include all receipts (including prepayments or deposits) for
licenses, pilots, studies, tests, maintenance, upgrades, and any other form of
payment received related to the products or services of Operating PCG, FMM and
any related entity that now or hereafter exists. Operating PCG and FMM agree
that they shall make no attempts to "manage" collections of any such receipts in
order to impact the amount of the Formula Amount for any month. By way of
example, if the receipts for January, February and March of 2003 were $350,000,
$425,000 and $475,000, respectively, the Formula Amounts would be zero in
January, zero in February due to the carryover, and $25,000 in March (50% of
$50,000 excess over $400,000 left after application of $25,000 remaining
carryover from January). Since the Formula Amount under this example is less
than the $50,000 fixed minimum amount for each of the three months, the
principal due would have been $50,000 for each month of the example.
2. Forbearance Fee. The Forbearance Fee set forth in the Amended
Forbearance dated June 7, 2002 (the "Initial Forbearance Fee"), remains in
effect unaltered by this Fifth Amendment except as to the dates on which the
payment of such fee is due as set forth above. Due to the extent of the
forbearance requested by Operating PCG and the Guarantors, the parties agree
that in partial consideration for the agreements of Xxxxxx Capital hereunder
there shall be a "Second Forbearance Fee" payable with respect to this Fifth
Amendment as follows (the Initial Forbearance Fee and the Second Forbearance
Fee, collectively the "Forbearance Fees"):
(a) On the last day of each month from November 30, 2002 through
and including June 30, 2003, unless all amounts due under the
Note and with respect to Security Documents, the Forbearances
and all other Transaction and Assumption Documents are paid in
full on or before each such date, there shall accrue a
forbearance fee of $25,000 for each such month of this
forbearance payable by Operating PCG and/or the Guarantors to
Xxxxxx Capital (the Second Forbearance Fee shall not continue
to accrue after such payment in full); provided, however
(i) If payment in full of all amounts now or hereafter
due under the Note, the Forbearances, the Security
Documents, and any other of the Transaction and
Assumption Documents is made on or before March 31,
2003, Xxxxxx Capital agrees that as a prepayment
discount it will waive all four months of the Second
Forbearance Fee accruing before the date of such
payment in full and, combined with the months of the
fee avoided by such prepayment, no Second Forbearance
Fee shall be due;
(ii) If payment in full of all amounts now or hereafter
due under the Note, the Forbearances, the Security
Documents, and any other of the Transaction and
Assumption Documents is made on or before April 30,
2003, Xxxxxx Capital agrees that as a prepayment
discount it will waive three months of the Second
Forbearance Fee accruing before the date of such
payment in full and, combined with the months of the
fee avoided by such prepayment, two months of the
Second Forbearance Fee (or $50,000.00) will remain
due and payable at the time of such prepayment;
(iii) If payment in full of all amounts now or hereafter
due under the Note, the Forbearances, the Security
Documents, and any other of the Transaction and
Assumption Documents is made on or before May 31,
2003, Xxxxxx Capital agrees that as a prepayment
discount it will waive two months of the Second
Forbearance Fee accruing before the date of such
payment in full and, combined with the months of the
fee avoided by such prepayment, four months of the
Second Forbearance Fee (or $100,000.00) will remain
due and payable at the time of such prepayment;
(iv) If payment in full of all amounts now or hereafter
due under the Note, the Forbearances, the Security
Documents, and any other of the Transaction and
Assumption Documents is made on or before June 30,
2003, Xxxxxx Capital agrees that as a prepayment
discount it will waive one month of the Second
Forbearance Fee accruing before the date of such
payment in full and, combined with the month of the
fee avoided by such prepayment, six months of the
Second Forbearance Fee (or $150,000.00) will remain
due and payable at the time of such prepayment;
The Forbearance Fees shall be paid by means of cash or an addition to the
principal amount due under the Note, with such principal amount due as set forth
above. At the election of Xxxxxx Capital, the addition of the Initial and Second
Forbearance Fees to the principal due under the Note shall be documented at the
time the amount of the total of such fees is determinable by an amendment to the
Note and to the Security Documents and the other Transaction and Assumption
Documents to the extent required. It shall be the express intent of all of the
parties hereto that the fee shall constitute an amount due under the Note as
fully and completely as if it had been included in the original Note amount,
with all of the protections, rights, collateral and other security and
guaranties as are provided to the original Note amount. Such addition shall be
effected by means of an amendment to the Note and the other applicable documents
and shall not constitute a new note or a novation of the Note. The parties agree
to cooperate with Xxxxxx Capital to effect this in a manner as to preserve in
effect all of the protections, rights, dates of perfection, collateral and other
security and guaranties; provided however, in the event this can not be
accomplished, all of the parties hereto agree that if requested by Xxxxxx
Capital they will execute and enter into replacement guaranties, Security
Documents and other related agreements to provide the same protections to Xxxxxx
Capital as relate to the original Note amount. The parties agree and acknowledge
that the fees are reasonable consideration for the agreements made herein and
are not, and shall not be deemed, penalties or other punitive charges. It is the
express intent of the parties that the Forbearance Fees are consideration for
the forbearance by Xxxxxx Capital of its rights under the Transaction and
Assumption Documents for the time periods and under the circumstances set forth
in the respective Forbearance Agreements, and are not, and are not intended to
be, interest. If notwithstanding the intent of the parties, (i) either or both
the Initial or Second Forbearance Fees are determined by a court having
jurisdiction over the enforcement of the rights of the parties hereto to be
additional interest and (ii) such amounts together with the interest rates
(including the default rates) actually in effect under the Note collectively
exceed, for one or more periods during the term of the Note and Forbearances,
the rates that can be lawfully charged under the Note as modified by the
Forbearance Agreements, the amount of the interest and fees accruing under the
Note and the Forbearances for such periods shall be reduced to the maximum
allowable by applicable law.
3. Acknowledgement of Current Default; Conditional Waiver. Operating
PCG and the Guarantors expressly acknowledge that Operating PCG's and
Guarantors' failure to pay the Notes when due is a default under the Transaction
and Assumption Documents and prior Forbearances; that Operating PCG and the
Guarantors are unable to cure the default; and that Operating PCG and the
Guarantors have no offsets, claims or defenses against Xxxxxx Capital under the
guaranties, the Security Documents and the other Transaction and Assumption
Documents and at the election of Xxxxxx Capital, the Note would be immediately
due and payable. Notwithstanding the foregoing, pursuant to this Fifth
Amendment, Xxxxxx Capital has agreed to forbear from the exercise of certain of
its rights and remedies under such agreements with respect to the above
identified default, subject to full compliance with the conditions of this Fifth
Amendment. On the condition precedent that Operating PCG and the Guarantors
achieve and maintain compliance with the terms of this Fifth Amendment, the
Forbearances and of the Transaction and Assumption Documents (except with
respect to payments, which shall be in accordance with the schedule set forth
above), this Fifth Amendment shall constitute a limited waiver of the payment
default referred to in recital I above; provided however, that upon and during
the continuation of a breach or default of any of the terms of this Fifth
Amendment or of any other default under the Forbearance as amended, the Note,
the Security Documents or any of the other Transaction and Assumption Documents,
the waiver of such payment default shall be terminated and the default condition
shall once again exist.
4. No Effect on Other Provisions, Defenses, Rights or Remedies. All
terms and provisions contained in the Forbearance as amended, the Note, the
Security Documents and the other Transaction and Assumption Documents and not
specifically changed hereby shall remain in full force and effect. The
Guarantors acknowledge that, although under the terms of such agreements their
consent or concurrence to this Fifth Amendment is not required and that their
obligations, rights and defenses are not changed by this Fifth Amendment (except
to the extent a fee has been, and an additional fee may hereafter be, added to
the Note), the Guarantors have executed and delivered this Fifth Amendment for
the purpose of expressly (i) acknowledging notice of this Fifth Amendment
(although notice is not required), (ii) consenting to the provisions hereof
(although their consent is not required), (iii) agreeing that their obligations
and responsibilities under the guaranties, the other Security Documents and
other Transaction and Assumption Documents shall continue in full force and
effect, not diminished or affected by this Fifth Amendment or by Xxxxxx
Capital's delay or willingness to forbear in the enforcement of its rights under
the Forbearance as amended, the Note, the Security Documents or the other
Transaction and Assumption Documents, and (iii) agreeing that no defenses to
their obligations and responsibilities have arisen or are strengthened by virtue
of this Fifth Amendment or Xxxxxx Capital's conduct with respect to its rights
under any of such agreements.
5. Limited Waiver. Operating PCG and the Guarantors acknowledge and
agree that except as specifically provided herein, nothing herein shall be
construed or considered as a waiver by Xxxxxx Capital of any event of default
under the Note, the Security Documents or any of the other Transaction and
Assumption Documents or a waiver of Xxxxxx Capital's right to resort to any
remedy under any of such agreements. Operating PCG and the Guarantors
acknowledge and agree that in the event Operating PCG and/or any Guarantor
default in any respect hereunder or under the Forbearance as amended, the Note,
the Security Documents or any of the other Transaction and Assumption Documents,
Xxxxxx Capital shall have the right to resort to all of its rights and remedies
under such any or all of such agreements. Notwithstanding the provisions of this
Fifth Amendment providing for forbearance and notwithstanding any prior
forbearances or waivers issued by Xxxxxx Capital, Operating PCG and Guarantors
acknowledge that Operating PCG and Guarantors are not entitled to any further
forbearance, modifications, extensions or waivers other than those set forth
herein, either expressly, implicitly, by operation of law or otherwise. No
waiver and no modifications, extension, amendment, discharge, or change of the
Forbearance as amended, the Note, the Security Documents or other Transaction
and Assumption Documents, except as otherwise provided herein, shall be valid
unless the same is in writing and signed by the party against which the
enforcement of such waiver, modification, extension, amendment, discharge, or
change is sought. Subject to the provisions of the Forbearance as amended, the
Note, the Security Documents or the other Transaction and Assumption Documents,
this Fifth Amendment contains the entire agreement between the parties relating
to the subject matter of this Fifth Amendment, and all prior or contemporaneous
agreements, understandings, representations, and statements, oral or written,
are merged herein.
6. Obligation to Execute and File Amendments and Documents, Extensions
and Other Actions; Subordination Agreement. Operating PCG and the Guarantors
agree to execute and/or file all documentation, filings (including UCC's) or
notices that Xxxxxx Capital or its attorneys deem necessary or advisable to
protect Xxxxxx Capital's rights, interests, remedies, and protections that may
have been impacted by the change of name and state of incorporation of Parent
PCG such that Xxxxxx Capital's rights, interests, remedies, perfection, and
protections will be the same as if the change, change of state of incorporation,
extensions, or forbearances had not occurred. All of such documentation, filings
and notices shall be completed within two weeks of the date hereof. The parties
also agree to take all steps and execute all documentation, including without
limitation, execution of an amendment or extension of the Escrow Agreement among
the parties that are necessary or deemed advisable by Xxxxxx Capital due to the
extension of time for payment of the Note contemplated herein. Operating PCG and
the Guarantors covenant and agree to cause to be executed appropriate
subordination agreements (similar to those previously used by PCG's lenders) for
the purpose of subordinating any additional borrowings undertaken by Operating
PCG during the term hereof to the Note and the obligations hereunder. Operating
PCG shall provide copies of all such subordination agreements to Xxxxxx Capital.
7. Certain Representations and Covenants. Operating PCG and the
Guarantors hereby represent, warrant, and covenant the following:
(a) There are currently 25,880,136 shares of the Common Stock of
Operating PCG outstanding on the date hereof, of which 25,559,802 shares are
owned by Parent PCG, and no additional shares shall be issued during the term of
this Forbearance;
(b) There are no shares of any other class of stock of Operating PCG
outstanding on the date hereof and no shares of any class of stock of Operating
PCG shall be issued during the term of this Forbearance;
(c) There are 100 shares of the Common Stock of Vallarta Cuatro, Ltd, a
Colorado corporation, outstanding on the date hereof, 50 of which are owned by
Fields, and no additional shares shall be issued during the term of this
Forbearance.
(d) There are no shares of any other class of stock of Vallarta Cuatro,
Ltd outstanding on the date hereof and no shares of any class of stock of
Vallarta Cuatro, Ltd shall be issued during the term of this Forbearance.
(e) The villa owned by Vallarta Cuatro, Ltd. was not damaged by the
hurricane that recently passed through Puerto Vallarta, Mexico or by any other
event occurring since the representations of valuation and pictures received by
Xxxxxx Capital recently from the real estate agent located there and referred to
Xxxxxx Capital by Operating PCG.
(e) Neither Operating PCG nor the Guarantors have taken any acts or
omitted to take any acts that have or will with the passage of time result in a
loss or reduction in the validity or perfection of the security interests of
Xxxxxx Capital granted in the various Security Documents and other Transaction
and Assumption Documents. In the event any acts, or the execution and delivery
of any documents, are required of Operating PCG or any of the Guarantors to
maintain or reinstate the security interests or perfection of Xxxxxx Capital in
any collateral relating to the Transaction, Operating PCG and the Guarantors
each agrees to take any such action and execute and deliver any such documents
promptly (but in no event later than two weeks) upon request of Xxxxxx Capital.
8. Default Under this Fifth Amendment; Expenses. Operating PCG's and/or
any Guarantor's failure to make any payments required hereunder or to perform
any obligation required by this Fifth Amendment, the Forbearance as amended, the
Note, the Security Documents, or any of the other Transaction and Assumption
Documents shall constitute an event of default under this Fifth Amendment and in
the event of such a default, Xxxxxx Capital may thereafter elect to exercise any
and all of its rights or remedies hereunder and under any of such agreements.
Regardless of Xxxxxx Capital's election of rights and remedies under the
preceding sentence, interest on the principal balance due under the Note shall
continue to accrue during any period of a default under this Forbearance as
amended at the default rate (which is equal to the rates set forth in Section
1). The parties further expressly acknowledge and agree that Xxxxxx Capital's
costs and attorneys' fees incurred in connection with the preparation and
enforcement of this Fifth Amendment are costs of enforcement and collection
payable by Operating PCG and the Guarantors under the Note and Transaction and
Assumption Documents. As detailed on Schedule 1 hereto there are outstanding
expenses of $ 21,352.18 for which Xxxxxx Capital has received xxxxxxxx related
to negotiations and drafting of this and previous Forbearances and prior
amendments to other documents for which reimbursement is required under the
Transaction and Assumption Agreements and Forbearances. The parties agree that
these amounts shall be reimbursed to Xxxxxx Capital on or before December 31,
2002. Any remaining or future xxxxxxxx for reimbursable costs will be paid
within 20 days of invoice.
9. Further Assurances. Operating PCG and each of the Guarantors agree
to, and to cause each of its affiliates to, from time to time, execute and
deliver such additional instruments, documents (including without limitation UCC
financing statements and similar notice instruments and documents), assumptions
or assurances and take such other actions as may be necessary, or otherwise
requested by Xxxxxx Capital to confirm and assure that their obligations with
respect to or related to this Fifth Amendment, the Forbearance as amended, the
Note, the Security Documents, or any of the other Transaction and Assumption
Documents. In the event this Fifth Amendment diminishes or eliminates any of the
rights, interests or remedies of Xxxxxx Capital under any of such agreements in
any respect (other than delaying enforcement of any of such rights as set forth
herein), Operating PCG and the Guarantors agree that they shall take all steps
necessary to cure or reverse any such diminution or elimination as requested by
Xxxxxx Capital. If appropriate action to promptly cure or reverse is not taken,
or it is not possible to cure or reverse, then at the election of Xxxxxx
Capital, Operating PCG and the Guarantors agree that this Forbearance shall be
null and void and of no effect and Xxxxxx Capital's rights and remedies under
the Forbearance as amended, the Note, the Security Documents, and the other
Transaction and Assumption Documents shall be reinstated as if the Fifth
Amendment had not occurred, with all appropriate documentation executed (and
filed if applicable) to effect such reversion and restore the rights and
obligations owed to Xxxxxx Capital.
10. Governing Law. This Fifth Amendment shall be governed by the laws
of the State of Utah.
11. Counterparts. This Fifth Amendment may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this Fifth
Amendment and all of which, when taken together, will be deemed to constitute
one and the same instrument. Signatures executed and transmitted via facsimile
shall be as effective as original signatures.
In witness whereof, the parties to this Fifth Amendment have executed
this instrument effective as of the date first above written, regardless of the
actual date of signing. Operating PCG and each of the Guarantors accepts the
terms and conditions of the foregoing Fifth Amendment.
RIVERVIEW FINANCIAL CORP., PARK CITY GROUP, INC.,
a California corporation a Nevada corporation ("Parent PCG")
By: ______________________________ By: ______________________________
Its: _____________________________ ts: ______________________________
Date: ____________________________ Date: ____________________________
PARK CITY GROUP, INC. FRESH MARKET MANAGER, LLC,
a Delaware corporation ("Operating PCG") a Utah limited liability company
By: ______________________________ By: ______________________________
Its: _____________________________ ts: ______________________________
Date: ____________________________ Date: ____________________________
XXXXXX CAPITAL, LLC,
a Georgia limited liability company
______________________________
Xxxxxxx X. Xxxxxx
By: ______________________________
Its: _____________________________ ______________________________
Date: ____________________________ Xxxxxxx X. Xxxxxxx
SCHEDULE 1
Detail of Costs Related to
Amendments and Forbearances
Xxxxxxxx from Xxxxxxx X. Xxxxxx, Esq. for negotiations & drafting of various
amendments of documents and forbearances:
Billing Period Amount of Billing
From December, 2001 - June 2002 $ 8,643.75
From July, 2002 - October, 2002 $ 8,950.00
Xxxxxxxx from Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, Attorneys, for assistance in
local law aspects of negotiations & drafting of various amendments of documents
and forbearances:
Billing Period Amount of Billing
Through December 31, 2001 $ 2,712.52
January - June, 2002 $ 1,045.91
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Total $21,352.18
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