AMENDMENT OF SECURITIES PURCHASE AGREEMENT
AMENDMENT
OF SECURITIES PURCHASE AGREEMENT
This
AMENDMENT OF SECURITIES PURCHASE AGREEMENT dated as of April ___, 2010
(this “Amendment”),
is among EPIC ENERGY RESOURCES, INC., a Colorado corporation (the “Company”),
and one or more of the holders of the Company’s 10% secured debentures due
December 5, 2012 and issued on December 5, 2007 (each a “Holder”
and, collectively, the “Holders”).
RECITALS
A. Reference
is made to (i) that certain Securities Purchase Agreement dated as of December
5, 2007, among the Company and the original holders, as amended by that certain
Amendment Agreement dated as of February 26, 2009 (and as otherwise amended,
restated, supplemented or otherwise modified from time to time until the date
hereof, the “Purchase
Agreement”) and (ii) the Company’s 10% secured debentures due
December 5, 2012 and issued on December 5, 2007 (as the same
have been amended, supplemented or otherwise modified from time to time prior to
the date hereof, the “Debentures”).
B. Pursuant
to Section
4.19(c) of the Purchase Agreement, the Company is required to achieve, on
a consolidated basis, EBITDA of at least $1,000,000 for each three-month period
ending on March 31, June 30, September 30 and December 31 beginning with
the three-month period commencing January 1, 2010, and continuing until none of
the Debentures remain outstanding. The Company has requested that
such requirement be amended to commence with the three-month period beginning
April 1, 2010.
C. The
Holders party hereto have executed and delivered this Amendment to evidence
their amendment of Section 4.19(c) for
such period, as provided herein.
D. The
Purchase Agreement imposes additional covenants on the Company of which the
Company seeks a waiver.
E. The
Company intends to conduct a private placement of up to 5,000,000 shares of
Series A Convertible Preferred Stock to accredited investors, which is exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended
and related exchange offers (the “March 2010
Offerings”).
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each of the Holders party hereto agrees as
follows:
Section
1.
Definitions. Capitalized
terms used in this Amendment, to the extent not otherwise defined herein, shall
have the same meaning as in the Purchase Agreement and Debentures.
Section
2.
Amendment. Section
4.19(c) of the Purchase Agreement is hereby amended by deleting the phrase
“commencing on January 1, 2010” and inserting in place thereof the phrase
“commencing on April 1, 2010”.
Section
3.
Waiver of
all Holders Party Hereto. Each Holder severally and not
jointly hereby waives:
(a) any
breach of Section 4.21 of the Purchase Agreement as a result of the Company’s
increase of the individual cash salaries of the chief executive officer and the
chief financial officer beyond 2008 levels in October, 2009 prior to the date
hereof;
(b) any
breach of Section 4.19(d) or (e) of the Purchase Agreement as a result of the
Company’s failure to issue any report to the Agent prior to the date
hereof;
(c) any
breach of Section 4.20 of the Purchase Agreement as a result of the Company
issuing approximately 1,200,000 shares of the Company’s Series A Preferred Stock
to members of management in exchange for deferred salaries and directors for
past board fees and reduced compensation for management in connection with the
March 2010 Offerings;
(d) any
breach of Section 4.14 of the Purchase Agreement as a result of the Company’s
redemption of some, but not all, of the Debentures in connection with the
consummation of the transactions contemplated by this Amendment;
and
(e) any
breach of Section 4.19(c) of the Purchase Agreement as a result of the Company’s
failure to achieve, on a consolidated basis, EBITDA (as defined in the Purchase
Agreement) of at least $1,000,000 for the three month period ended March 31,
2010.
Section
4. Representations and
Warranties. The Company hereby makes to the Holders party
hereto the following representations and warranties:
(a) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Amendment and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Amendment by the Company and the consummation
by it of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, its board of directors or its stockholders in connection therewith.
This Amendment has been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
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(b) No
Conflicts. The execution, delivery and performance of this
Amendment by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any material agreement,
credit facility, debt or other material instrument (evidencing a Company or
Subsidiary debt or otherwise) or other material understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) conflict with or result
in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company
or a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.
(c) Equal
Consideration. No consideration has been paid to any person to
amend or consent to a waiver, modification, forbearance or otherwise pursuant to
this Amendment.
(d) Survival; Bring
Down. All of the Company’s warranties and representations
contained in this Amendment shall survive the execution, delivery and acceptance
of this Amendment by the parties hereto.
(e) No
Breaches. Except as expressly set forth herein, the Company
acknowledges there are no breaches under the Purchase Agreement that currently
exist as of the date of this Amendment.
Section
5. Miscellaneous.
(a) All
questions concerning the construction, validity, enforcement and interpretation
of this Amendment shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Amendment and (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Amendment and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law. If either party shall
commence an action or proceeding to enforce any provisions of this Amendment,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or
proceeding.
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(b) The
respective obligations, amendments, agreements and waivers hereunder of the
Holders party hereto are subject to the accuracy in all material respects of the
representations and warranties of the Company contained herein.
(c) Except
as expressly set forth above, all of the terms and conditions of the Purchase
Agreement shall continue in full force and effect after the execution of this
Amendment and shall not be in any way changed, modified or superseded by the
terms set forth herein. The Company shall, within 4 Trading Days of
the date hereof, issue a Current Report on Form 8-K disclosing the material
terms of the transactions contemplated hereby, and shall attach this Amendment
and all other related agreements thereto (the “8-K
Filing”). From and after the filing of the 8-K Filing with the
Commission, the Holder shall not be in possession of any material, nonpublic
information received from the Company or any of its officers, directors,
employees or agents, that is not disclosed in the 8-K Filing. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise this Amendment and, therefore, any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Amendment or
any amendments hereto.
(d) Except
as expressly set forth herein, each Holder, to its knowledge without independent
investigation, acknowledges there are no breaches under the Purchase Agreement
that currently exist as of the date of that Holder’s execution of this
Amendment.
(e) This
Amendment may be executed in two or more counterparts and by facsimile signature
or otherwise, and each of such counterparts shall be deemed an original and all
of such counterparts together shall constitute one and the same
agreement. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Amendment.
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(f) The
obligations of each Holder under this Amendment and any Transaction Document are
several and not joint with the obligations of any other Holder, and no Holder
shall be responsible in any way for the performance or non-performance of the
obligations of any other Holder under this Amendment or any Transaction
Document. Nothing contained herein or in any Transaction Document, and no action
taken by any Holder pursuant thereto, shall be deemed to constitute the Holders
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Holders are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by
this Amendment or the Transaction Documents. Each Holder shall be entitled to
independently protect and enforce its rights, including without limitation, the
rights arising out of this Amendment or out of the other Transaction Documents,
and it shall not be necessary for any other Holder to be joined as an additional
party in any proceeding for such purpose. Each Holder has been represented by
its own separate legal counsel in their review and negotiation of this Amendment
and the Transaction Documents.
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IN
WITNESS WHEREOF, the undersigned parties hereto have caused this Amendment of
Purchase Agreement to be duly executed by their respective authorized officers
as of the day and year first above written.
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