EXHIBIT 10.1
MODIFICATION AND AMENDMENT AGREEMENT DATED JUNE 30, 2006
MODIFICATION, WAIVER AND AMENDMENT AGREEMENT
This Modification and Amendment Agreement ("Agreement") dated as of
June 30, 2006 is entered into by and among River Capital Group Inc., a Delaware
corporation (the "Company"), Longview Fund, L.P., Longview Equity Fund, L.P. and
Longview International Equity Fund, L.P. (each a "Subscriber" and collectively
"Subscribers").
WHEREAS, the Company and the Subscribers are parties to a Subscription
Agreement ("Subscription Agreement") dated May 23, 2005 as amended on May 31,
2006 in the Modification and Amendment Agreement ("Modification Agreement")
relating to an aggregate investment by Subscribers of $200,000 in principal
amount of secured convertible notes of the Company convertible into shares of
the Company's $.001 par value Common Stock ("Notes") and Warrants in the amounts
set forth on Schedule A attached hereto.
NOW THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement, the Company and the Subscribers hereby
agree as follows:
1. All the capitalized terms employed herein shall have the meanings
attributed to them in the Subscription Agreement dated May 23, 2005 and the
Modification Agreement, and the documents and agreements delivered therewith.
2. The Company and the Subscribers hereby agree to amend the
Transaction Documents to reflect the additional Purchase Price ("Additional
Purchase Price") as set forth on Schedule A hereto. Purchase Price shall mean
the aggregate of the Purchase Price in connection with the May 23, 2005 Closing
Date and the Additional Purchase Price.
3. An additional Closing (the "Second Closing") shall take place on or
before June 30, 2006 (the "Second Closing Date") in connection with the
Additional Purchase Price and the Notes and Warrants issuable in connection
therewith, upon satisfaction of all conditions to Closing set forth in the
Transaction Documents and in this Amendment. The amount of the Additional
Purchase Price and all documents to be delivered hereunder will be deposited and
held with the Escrow Agent and released pursuant to the terms of an escrow
agreement (the "Escrow Agreement"). The Notes and Warrants to be delivered on
the Second Closing Date are included in the definition of "Securities" in the
Subscription Agreement.
4. The Company and Subscribers hereby agree to waive any
disproportionality between the Purchase Price of the May 23, 2005 Closing Date
and the Additional Purchase Price of the Second Closing.
5. For the benefit of the Subscriber hereto, the Company hereby renews
all the representations, warranties, covenants undertakings and indemnifications
contained in the Transaction Documents, as if such representations were made by
the Company as of this date and as of the Second Closing Date.
6. All the representations, warranties and undertakings made by the
Company in the Transaction Documents as of the Closing Date are hereby made by
the Company as of the Second Closing Date, as if such representations,
warranties and undertakings were also made and given on the Second Closing Date.
7. All the representations, warranties and undertakings made by the
Subscribers contained in the Transaction Documents as of the Closing Date are
hereby made by the Subscribers as of the Second Closing Date, as if such
representations, warranties and undertakings were also made and given on the
Second Closing Date.
8. All of the covenants and conditions set forth in the Subscription
Agreement are hereby adopted and renewed by the Company as of and for the Second
Closing Date.
9. On or before the Second Closing Date, the Company will deliver to
Longview Fund, LP, a Note and Warrants issued as of the Second Closing Date in
the amounts set forth on Schedule A hereto in connection with the Additional
Purchase Price which Longview Fund, LP will deposit with the Escrow Agent on or
before the Second Closing Date.
10. The Note to be issued on the Second Closing Date will be identical
to the Notes issued on the Closing Date except as to Issue Date, Expiration
Date, Interest Rate, which shall be accrued at the annual rate equal to the
greater of (i) four percent (4%) above the prime rate announced from time to
time in the Wall Street Journal, and (ii) ten percent (10%), and Section 1.3 -
Prepayment shall be modified as follows: "the Borrower shall have the right to
prepay the principal amount of this Note by paying to the Holder 110% of the
amount of principal to be prepaid together with interest...".
11. The Warrants to be issued on the Second Closing Date will be
identical to the Warrants issued on the Closing Date except as to the Issue
Date, Expiration Date and Purchase Price, which shall be $0.35.
12. The attorney for the Subscriber will receive additional Legal Fees
from the Company of $5,000 and 20,000 Shares of Common Stock, which will be
payable on the Release Date out of the Escrowed Payment (as defined in the
Escrow Agreement).
13. The signators hereto acknowledge and agree that the Subscription
Agreement, Security Agreement and any other documents executed by the Company
and Subscribers relate to the Additional Purchase Price as if such Additional
Purchase Price had been paid and released to the Company on the May 23, 2005,
Closing Date. The attorney for the Subscriber is authorized to make additional
security interest filings at her discretion.
14. The undersigned consent to the amendment of all Schedules,
Exhibits, and documents including but not limited to the Security Agreement to
include the Additional Purchase Price as part thereof.
15. The parties hereto agree to expeditiously proceed with the Second
Closing.
16. All other terms of the Transaction Documents shall remain in full
force and effect and govern this Agreement.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment as of the date first written above.
RIVER CAPITAL GROUP, INC. LONGVIEW FUND, L.P.
the "Company"
By: /s/ XXXXXX XXXXXX By: /s/ S. XXXXXXX XXXXXXX
------------------------------ -----------------------------------
LONGVIEW EQUITY FUND, INC. LONGVIEW INTERNATIONAL EQUITY
FUND, L.P.
By: /s/ XXXXX X. XXXXXXX By: /s/ XXXXX X. XXXXXXX
------------------------------ -----------------------------------
SCHEDULE A TO MODIFICATION AGREEMENT
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ADDITIONAL WARRANTS TO PURCHASE WARRANTS
SUBSCRIBER PURCHASE BE ISSUED IN PRICE OF ISSUED ON
PRICE CONNECTION WITH MAY 23, 2005 MAY 23, 2005
ADDITIONAL
PURCHASE PRICE
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LONGVIEW FUND, LP $300,000.00 525,000 $100,000.00 384,615
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
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LONGVIEW EQUITY FUND, LP -0- -0- $70,000.00 269,231
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
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LONGVIEW INTERNATIONAL EQUITY FUND, LP -0- -0- $30,000.00 115,384
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
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TOTALS $300,000.00 525,000 $200,000.00 769,230
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