AMENDED AND RESTATED SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT
Exhibit
10.9
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT is made as
of
this 15th
day of
October, 2007 by and between United Benefits & Pension Services, Inc., a
Delaware corporation (the “Company”)
and
the parties signatory hereto and identified in Schedule
A
hereto
(hereinafter collectively referred to as the “Purchasers”
or
the
“Buyers”).
WHEREAS
the
Company previously entered into that certain Secured Convertible Note Purchase
Agreement (the “Original
Purchase Agreement”),
dated
as of April 16, 2007, by and between the Company and the parties signatory
thereto and identified in Schedule A thereto (the “Original
Purchasers”),
pursuant to which the Company issued Secured Convertible Notes due September
30,
2007 in the aggregate principal amount of $250,000 (the “Original
Notes”)
to the
Original Purchasers;
WHEREAS,
as of
October 1, 2007, the Company’s obligations under $60,000 aggregate principal
amount of the Original Notes issued in favor of Core Fund L. P. and Flat
Universe, LLC had been satisfied;
WHEREAS,
as of
October 1, 2007, the Original Notes issued in favor of to the Persons identified
in Schedule
B
hereto
(the “Existing
Purchasers”)
in the
aggregate principal amount of $190,000 (the “Outstanding
Notes”)
remained outstanding;
WHEREAS
the
Existing Purchasers and the Company entered into that certain Amendment (the
“Purchase
Agreement Amendment”),
dated
October 1, 2007, pursuant to which the Original Purchase Agreement and the
Outstanding Notes were amended to, among other things, extend the maturity
dates
of the Outstanding Notes to November 30, 2007 (as amended, the “Existing
Notes”).
WHEREAS,
as of
the date hereof, the Existing Notes remain outstanding;
WHEREAS
the
Company desires to issue additional Secured Convertible Notes due November
30,
2007 in the aggregate principal amount of $100,000 (the “Additional
Notes”)
to
Xxxxxxx Xxx (“X.
Xxx”)
and
Xxxx Xxx (“X.
Xxx”,
and,
together with X. Xxx, the “Additional
Purchasers”);
WHEREAS
the
Purchasers desire to amend and restate the Original Purchase Agreement to,
among
other things, add the Additional Purchasers as parties thereto and provide
for
the conversion of the Notes (as defined in Section 1.01(b) hereof) upon the
completion of the Private Placement (as defined in Section 4.01(h) hereof);
and
WHEREAS
Cane
Xxxxx, LLP has resigned as Collateral Agent (as defined in Section 7.14 hereof)
and has been replaced by Spyglass Capital Partners LLC.
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements herein contained, the
parties agree as follows:
ARTICLE
I
PURCHASE,
SALE AND TERMS OF NOTES
1.01.The
Notes.
(a) The
Company previously authorized the issuance and sale to the Existing Purchasers
of the Existing Notes, in the original aggregate principal amount of
$190,000.00. Purchasers hereby acknowledge and agree that pursuant to and in
accordance with the Purchase Agreement Amendment, the Maturity Date (as defined
in the Existing Notes) is November 30, 2007.
(b) The
Company has authorized the issuance and sale to the Additional Purchasers of
the
Additional Notes in the original aggregate principal amount of $100,000.00.
The
Additional Notes shall be substantially in the form set forth in Exhibit
1.01.
The
Additional Notes and the Existing Notes may hereinafter be referred to
individually as a “Note”
and
collectively as the “Notes”,
which
terms shall also include any notes delivered in exchange or replacement
therefor. As used hereinafter, the term Maturity Date shall have the meaning
set
forth in the Notes.
(c) The
Notes
shall be secured under the terms of the Pledge Agreement, dated April 16, 2007,
between the Company and the Collateral Agent (as defined in Section 7.14),
as
amended by the Pledge Agreement Amendment (as defined in Section 2.02) (as
amended, the “Pledge
Agreement”).
In
the event that, on or prior to the Maturity Date, the Company consummates a
reverse merger with a public corporation with no assets or liabilities, trading
on the OTC Bulletin Board (the “Public
Corporation”),
the
Notes shall be convertible into shares of the common stock of the Public
Corporation upon the terms set forth in the Notes. In the event that, on or
prior to the Maturity Date, the Company completes the Private Placement (as
defined in Section 4.01(h)), the Notes shall be convertible into shares of
the
common stock (“Common Stock”) of the Company.
1.02.Purchase
and Sale of Notes.
(a) The
Closing.
The
Company agrees to issue and sell to the Additional Purchasers, and, subject
to
and in reliance upon the representations, warranties, terms and conditions
of
this Agreement, the Additional Purchasers agree to purchase, the Additional
Notes for an aggregate purchase price of $100,000. Such purchase and sale shall
take place at a closing (the “Closing”)
to be
held at the offices of Xxxxxx Xxxxxx Rosenman LLP, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx,
Xxx Xxxx, 00000 at, 1:00 P.M. on October 15, 2007 or on such other date and
at such time as may be mutually agreed upon.
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(b) Use
of
Proceeds.
The
Company agrees to use the full proceeds from the sale of the Additional Notes
solely for general working capital, including, without limitation, the repayment
of advances made by the Chief Executive Officer of the Company on behalf of
the
Company to fund certain obligations of the Company.
1.03.
Payments
and Endorsements.
Payments of principal, interest and premium, if any, on the Notes, shall be
made
directly by check duly mailed or delivered to the Purchasers at the addresses
provided by Purchasers from time to time.
1.04.
Payment
on Non-Business Days.
Whenever any payment to be made shall be due on a Saturday, Sunday or a public
holiday under the laws of the State of New York, such payment may be made on
the
next succeeding business day, and such extension of time shall in such case
be
included in the computation of payment of interest due.
1.05.
Representations
by the Purchasers.
The
Purchasers represent, severally and not jointly, as follows:
(a) Limitations
on Resale of Securities Acquired in this Offering.
The
Notes and the Shares underlying the Notes acquired under this Agreement will
be
“restricted securities” and may in the future be sold only if registered with
the Securities and Exchange Commission or in compliance with limited exemptions
from registration under the Act, the availability of which must be established
to the satisfaction of the Company. The following legend will be placed on
the
Notes and certificates evidencing the shares if converted and not
registered:
The
securities represented by this Certificate have not been registered under the
Securities Act of 1933 (the “Act”)
and
are “restricted securities” as that term is defined in Rule 144 under the Act.
The securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act, or pursuant
to an
exemption from registration under the Act, the availability of which is to
be
established to the satisfaction of the corporation.
In
addition, stop transfer instructions regarding the Notes and underlying Common
Stock will be issued to the transfer agent of the Company until registered
or an
exemption is available. The Company will refuse to transfer the Notes and
underlying Common Stock not made pursuant to registration under the Act, or
pursuant to an available exemption from registration.
(b)
Investment
Purpose.
The
Additional Notes are being, and the Existing Notes have been, acquired for
the
Purchaser’s own account and not on behalf of any other person or entity. The
Additional Notes are being, and the Existing Notes have been, acquired for
investment purposes and not for resale or distribution.
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(c)
Receipt and Review of Information.
The
Purchasers have received and reviewed all information that they have requested
relating to the business, properties, financial condition and affairs of the
Company, and have been given the opportunity to discuss the business,
properties, financial condition, and affairs of the Company with its management.
The Purchasers have reviewed this information with their legal, investment,
financial, and tax and accounting advisors. As a result, Purchasers are
cognizant of the financial condition, capitalization, and proposed operations
and financing of the Company, and Purchasers have been able to evaluate the
merits and risks of the investment in the Notes.
(d) Purchasers
Have Not Relied on Other Information.
Purchasers acknowledge and understand that the Company has not authorized any
person to make any statements on its behalf which would in any way contradict
any of the information which the Company has provided to Purchasers in writing,
including the information set forth in this Agreement. Purchasers represent
to
the Company that Purchasers have not relied upon any such representations
regarding the Company, its business or financial condition, or this transaction
in making any decision to acquire the Notes offered hereby.
(e) Sophisticated
Investor/Accredited Investor Status.
Purchasers represent that they are sophisticated investors in securities with
companies in the development stage and acknowledges that they are able to fend
for themselves, can bear the economic risk of their investment, and have such
knowledge and experience in financial or business matters that they are capable
of evaluating the merits and risks of the investment in the Notes. In addition,
the purchasers are “accredited investors” as defined under the federal
securities laws. Purchasers are asked to furnish information and representations
sufficient for the Company to confirm the Purchasers' status as an accredited
investor in order for the Company to comply with its obligations to demonstrate
compliance with federal and with state securities laws.
ARTICLE
II
CONDITIONS
TO ADDITIONAL PURCHASERS’ OBLIGATION
The
obligation of the Purchasers to purchase and pay for the Additional Notes at
the
Closing is subject to the following conditions:
2.01.
Representations
and Warranties.
Each of
the representations and warranties of the Company set forth in Article III
hereof shall be true on the date of the Closing.
2.02.
Documentation
at Closing.
The
Additional Purchasers shall have received prior to or at the Closing of the
sale
and purchase of the Additional Notes all of the following, each in form and
substance satisfactory to the Additional Purchasers and its special counsel:
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(a) An
Amendment to Pledge Agreement, in the form attached as Exhibit
2.02(a),
(the
“Pledge
Agreement Amendment”),
shall
have been executed and delivered by Xxxxxxx X. Xxxxxxxxx (“Xxxxxxxxx”),
each
of the Existing Purchasers and the Collateral Agent (as defined in Section
7.14).
(b) The
Additional Notes.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
The
Company represents and warrants as follows:
3.01.
Organization
and Standing of the Company.
The
Company is a duly organized and validly existing corporation in good standing
under the laws of the jurisdiction in which it was organized and has all
requisite corporate power and authority for the ownership and operation of
its
properties and for the carrying on of its business as now conducted and as
now
proposed to be conducted. The Company has no Subsidiaries.
3.02.
Corporate
Action.
The
Company has all necessary corporate power and has taken all corporate action
required to make all the provisions of this Agreement, the Notes and any other
agreements and instruments executed in connection herewith and therewith the
valid and enforceable obligations they purport to be. The issuance of the Notes
is not subject to preemptive or other similar statutory or contractual rights
and will not conflict with any provisions of any agreement or instrument to
which the Company is a party or by which it is bound.
3.03.
Governmental
Approvals.
No
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the offer, issuance, sale, execution or delivery
by
the Company of, or for the performance by it of its obligations under, this
Agreement or the Notes.
3.04.
Litigation.
There
is no litigation or governmental proceeding or investigation pending or, to
the
best of the knowledge of the Company, threatened against the Company affecting
any of its properties or assets, or against any officer, key employee or
principal stockholder of the Company where such litigation, proceeding or
investigation, either individually or in the aggregate, would have a material
adverse effect on the Company. Neither the Company, nor, to the best of the
knowledge of the Company, any officer or key employee of the Company, or
principal stockholder of the Company, is in default with respect to any order,
writ, injunction, decree, ruling or decision of any court, commission, board
or
other government agency affecting the Company.
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3.05.
Compliance
with Other Instruments.
The
Company is in compliance in all respects with the terms and provisions of its
charter and by-laws and in all material respects with the terms and provisions
of the mortgages, indentures, leases, agreements and other instruments and
of
all judgments, decrees, governmental orders, statutes, rules and regulations
by
which it is bound or to which its properties or assets are subject.
3.06.
Title
to Assets, Trademarks, Patents.
The
Company has good and clear record and marketable title in fee to such of its
fixed assets as are real property, and good and merchantable title to all of
its
other assets, now carried on its books including those reflected in the most
recent balance sheet of the Company or acquired since the date of such balance
sheet (except personal property disposed of since said date in the ordinary
course of business) free of any mortgages, pledges, charges, liens, security
interests or other encumbrances. The Company enjoys peaceful and undisturbed
possession under all leases under which it is operating, and all said leases
are
valid and subsisting and in full force and effect. The Company owns or has
a
valid right to use the patents, patent rights, licenses, permits, trade secrets,
trademarks, trademark rights, trade names or trade name rights or franchises,
copyrights, inventions and intellectual property rights being used to conduct
its business as now operated and as now proposed to be operated; and the conduct
of its business as now operated and as now proposed to be operated does not
and
will not conflict with valid patents, patent rights, licenses, permits, trade
secrets, trademarks, trademark rights, trade names or trade name rights or
franchises, copyrights, inventions and intellectual property rights of others.
3.07.
Taxes.
The
Company has accurately prepared and timely filed all federal, state and other
tax returns required by law to be filed by it, and all taxes shown to be due
and
all additional assessments have been paid or provision made therefor. The
Company knows of no assessments or adjustments pending or threatened against
the
Company for any period, nor of any basis for any such assessment or adjustment.
3.08.
Insurance.
The
Company carries insurance covering its properties and business adequate and
customary for the type and scope of the properties and business, but in any
event in amounts sufficient to prevent the Company from becoming a
co-insurer.
3.09.
Books
and Records.
The
books of account, ledgers, order books, records and documents of the Company
accurately and completely reflect all material information relating to the
business of the Company, the nature, acquisition, maintenance, location and
collection of the assets of the Company, and the nature of all transactions
giving rise to the obligations or accounts receivable of the Company.
3.10 Other
Debt.
The
Company has no other secured or unsecured debt, other than obligations incurred
in the ordinary course of its business, obligations due and owing the Chief
Executive Officer of the Company in connection with advances made to fund
certain of the Company’s obligations, and obligations under the Existing
Notes.
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ARTICLE
IV
COVENANTS
OF THE COMPANY
4.01.
Affirmative
Covenants of the Company Other Than Reporting Requirements.
Without
limiting any other covenants and provisions hereof, the Company covenants and
agrees that, as long as any of the Notes are outstanding, it will perform and
observe the following covenants and provisions:
(a) Punctual
Payment.
Pay the
principal of, premium, if any, and interest on each of the Notes at the times
and place and in the manner provided in the Notes and herein.
(b) Payment
of Taxes and Trade Debt.
Pay and
discharge all taxes, assessments and governmental charges or levies imposed
upon
it or upon its income or profits or business, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a lien or charge upon any properties
of
the Company, provided that the Company shall not be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by appropriate proceedings if the Company shall have set aside on its books
adequate reserves with respect thereto. Pay when due, or in conformity with
customary trade terms, all lease obligations, all trade debt, and all other
Indebtedness incident to the operations of the Company, except such as are
being
contested in good faith and by appropriate proceedings if the Company concerned
shall have set aside on its books adequate reserves with respect thereto.
(c) Maintenance
of Insurance.
Maintain insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried
by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Company operates, but in any event in amounts
sufficient to prevent the Company from becoming a co-insurer.
(d) Preservation
of Corporate Existence.
Preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation. Preserve and maintain all licenses
and
other rights to use patents, processes, licenses, trademarks, trade names,
inventions, intellectual property rights or copyrights owned or possessed by
it
and necessary to the conduct of its business.
(e) Compliance
with Laws.
Comply
with all applicable laws, rules, regulations and orders of any governmental
authority, noncompliance with which could materially adversely affect its
business or condition, financial or other.
(f) Keeping
of Records and Books of Account.
Keep
adequate records and books of account, in which complete entries will be made
in
accordance with generally accepted accounting principles consistently applied,
reflecting all financial transactions of the Company a and in which, for each
fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
(g) Maintenance
of Properties, etc.
Maintain and preserve all of its properties, necessary or useful in the proper
conduct of its business, in good repair, working order and condition, ordinary
wear and tear excepted.
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(h) Reverse
Merger; Private Placement.
On or
before November 30, 2007, the Company intends to conduct either (i) a reverse
merger, reverse share exchange, reverse triangular merger or similar transaction
(“Reverse
Merger”)
with
the Public Corporation approved by Spyglass Capital Partners LLC; or (ii) a
private equity offering and a private debt offering (collectively, the
“Private
Placement”)
of the
Company’s securities for aggregate gross proceeds of approximately $17,000,000.
Notwithstanding any other provision of this Agreement or the Additional Notes,
if, and only if, neither the Reverse Merger nor the Private Placement is
consummated on or prior to November 30, 2007, then the Company shall owe a
one-time cash payment equal to 10% of the principal amount of the Additional
Notes in addition to the principal and interest then owing. In the event that
the Company consummates a Reverse Merger and closing of a related equity
financing, ownership of the Public Corporation shareholders shall be 10%, on
a
fully diluted post Reverse Merger, post equity financing basis, excluding the
Performance Issuance (as defined below). Should the Company consummate a Reverse
Merger in contravention of this Agreement and without the approval of Spyglass
Capital Partners LLC, the Company shall issue to Spyglass Capital Partners
LLC
common stock representing 10% of the Company on a fully-diluted, post-Reverse
Merger, post-equity financing basis, excluding the Performance Issuance.
As
used
herein, the term “Performance
Issuance”
shall
mean the issuance to Xxxxxxxxx (and/or the Chairman and/or Chief Financial
Officer of the Company), prior to or contemporaneously with the closing of
the
Reverse Merger, of an aggregate amount of Performance Incentive Shares (as
defined below) equal to 5% of the outstanding common stock of the Public
Corporation on a fully diluted basis (after giving effect to the conversion
of
the Notes, the consummation of the Reverse Merger, the completion of a related
equity financing and the acquisition by the Company of Associated Third Party
Administrators (“ATPA”)).
As
used herein, the term “Performance
Incentive Shares”
shall
mean shares of common stock of the Public Corporation issued for consideration
per share equal to the par value of such shares pursuant to a plan or agreement
which provides that such shares shall vest and become non-forfeitable upon
the
Public Corporation achieving pro forma consolidated EBITDA (as reasonably
determined by the Public Corporation’s independent registered accountants and
agreed to by Xxxxxxxxx, the Company and the Purchasers) equal to or exceeding
$5.15 million on an annualized basis (taking into account any cost savings,
revenue increases and other items relating to ATPA and excluding EBITDA
generated from other businesses which may be acquired subsequent to the closing
of the Reverse Merger) for two consecutive fiscal quarters ending no later
than
the ninth complete fiscal quarter after the closing of the Reverse
Merger.
(i) Registration
of Shares.
The
Company shall include the shares issuable upon conversion of the Notes (the
“Shares”)
in any
Registration Statement filed by the Company or the Public Corporation following
the Reverse Merger or the Private Placement, as the case may be. If the Company
does not file a Registration Statement for any other reason following the first
to occur of the Reverse Merger or the Private Placement, it agrees to file
a
Registration Statement within 60 days after closing of the Reverse Merger or
the
Private Placement for the Shares and use its best efforts to have the
Registration Statement declared effective as soon as possible. In the event
the
Company does not file the required Registration Statement within 60 days after
the closing of the Reverse Merger or the Private Placement, then the Company
shall pay to the Purchasers a one-time payment equal to $25,000. In the event
the Registration Statement is not declared effective within 120 days thereafter,
the Company shall pay an amount equal to an additional $5,000 each month until
the Registration Statement is declared effective, or until such time as Rule
144
is available for sale of the Shares, whichever occurs first.
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(j) Conversion
of Note.
The
Notes are contemplated as a bridge loan to the Private Placement or an equity
financing in conjunction with the Reverse Merger. In the event that the Company
consummates the Reverse Merger prior to the Maturity Date, at the closing of
the
Reverse Merger, the principal amount of the Notes shall automatically convert
into shares of common stock of the Public Corporation at a conversion price
equal to a 50% discount to the offering price per share in the equity offering
consummated prior to, or in connection with, the Reverse Merger, and all accrued
and unpaid interest thereon shall be due and payable in cash. Notwithstanding
any contrary provision contained in the Existing Notes, in the event that the
Company completes the Private Placement prior to the Maturity Date, at the
closing of the Private Placement, all of the Notes shall automatically convert
into shares of Common Stock, at a conversion price equal to a 50% discount
to
the offering price per share of Common Stock in the Private Placement, and
all
accrued and unpaid interest thereon shall be due and payable in cash.
(k) Payment
to Original Purchasers.
The
Company hereby agrees to pay to the holder of each Existing Note, on the earlier
to occur of (i) the conversion of the Existing Notes pursuant to this Agreement
or (ii) the Maturity Date, a one-time cash payment equal to 20% of the principal
amount of such Existing Note, which amount represents (y) a penalty pursuant
to
Section 4.01(h) of the Original Note Purchase Agreement in an amount equal
to
10% of the principal amount of such Existing Note, for failure to consummate
the
Reverse Merger prior to September 30, 2007; and (z) consideration for the
extension of the maturity date of such Existing Note pursuant to the Purchase
Agreement Amendment in an amount equal to 10% of the principal amount of such
Existing Note.
ARTICLE
V
EVENTS
OF
DEFAULT
5.01.
Events
of Default.
If any
of the following events (“Events of Default”) shall occur and be continuing:
(a) The
Company shall fail to pay any installment of principal of any of the Notes
when
due; or
(b) The
Company shall fail to pay any principal, interest or premium on any of the
Notes
when due and such failure shall continue for five (5) business days; or
(c) The
Company shall default in any material respect in the performance of any covenant
contained in this Agreement; or
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(d) Xxxxxxxxx
shall default in any material respect in the performance of any covenant
contained in either of the Pledge Agreement or Account Control Agreement; or
(e) Any
representation or warranty made by the Company in this Agreement, or by
Xxxxxxxxx in the Pledge Agreement or the Account Control Agreement, shall prove
to have been incorrect when made in any material respect.
ARTICLE
VI
DEFINITIONS
AND ACCOUNTING TERMS
6.01.
Certain
Defined Terms.
As used
in this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the
terms defined):
“Agreement”
means this Amended and Restated Secured Convertible Note Purchase Agreement
as
from time to time amended and in effect between the parties.
“Account
Control Agreement” shall mean the letter agreement, dated April 16, 2007, by and
among Xxxxxxxxx, Xxxxxxx Securities, Inc. and Cane Xxxxx, LLP.
“Company”
means and shall include United Benefits & Pension Services, Inc., and its
successors and assigns.
“Notes”
shall have the meaning assigned to that term in Section 1.01.
“Person”
means an individual, corporation, partnership, joint venture, trust, or
unincorporated organization, or a government or any agency or political
subdivision thereof.
“Purchaser”
means and shall include the Purchasers identified in Schedule A.
“Securities
Act” means the Securities Act of 1933 or any similar Federal statute, and the
rules and regulations of the Securities and Exchange Commission (or of any
other
Federal agency then administering the Securities Act) thereunder, all as the
same shall be in effect at the time.
“Subsidiary”
or “Subsidiaries” means any corporation or trust of which the Company and/or any
of its other Subsidiaries (as herein defined) directly or indirectly owns at
the
time all of the outstanding shares of every class of such corporation or trust
other than directors’ qualifying shares.
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6.02.
Accounting
Terms.
All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in preparation of financial statements in the United States.
ARTICLE
VII
MISCELLANEOUS
7.01.
No
Waiver; Cumulative Remedies.
No
failure or delay on the part of the Purchaser, or any other holder of the Notes
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power
or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
7.02.
Amendments,
Waivers and Consents.
Any
provision in this Agreement or the Notes to the contrary notwithstanding,
changes in or additions to this Agreement may be made, and compliance with
any
covenant or provision herein or therein set forth may be omitted or waived,
if
the Company (i) shall obtain consent thereto in writing from the holder or
holders of at least a majority in principal amount of all Notes then
outstanding, and (ii) shall, in each case, deliver copies of such consent in
writing to any holders who did not execute the same; provided
that no
such consent shall be effective to reduce or to postpone the date fixed for
the
payment of the principal (including any required redemption) or interest payable
on any Note, without the consent of the holder thereof, or to reduce the
percentage of the Notes the consent of the holders of which is required under
this Section. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only
in
the specific instance and for the specific purpose for which given. Written
notice of any waiver or consent effected under this subsection shall promptly
be
delivered by the Company to any holders who did not execute the same.
7.03.
Addresses
for Notices, etc.
All
notices, requests, demands and other communications provided for hereunder
shall
be in writing (including telegraphic communication) and mailed via certified
mail or by courier delivery and delivered to the applicable party at the
addresses indicated below:
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If
to the Company:
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Xxxxxxx
Xxxxxxxxx, CEO
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United
Benefits & Pension Services, Inc.
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000
Xxxxxxxxx Xxxx
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Xxxxxxxxx,
XX 00000
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With
a copy to:
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Xxxxxx
Xxxxxx, Esq
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Xxxxx
X. Xxxx, Esq.
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Xxxxxx
Xxxxxx Xxxxxxxx LLP
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000
Xxxxxxx Xxxxxx
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Xxx
Xxxx, XX 00000
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If
to the Purchaser:
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Payments
should be mailed to:
|
|
|
The
address indicated on such Purchaser’s Lender
Questionnaire
|
|
If
to any
other holder of the Notes: at such holder’s address for notice as set forth in
the register maintained by the Company, or, as to each of the foregoing, at
such
other address as shall be designated by such Person in a written notice to
the
other party complying as to delivery with the terms of this Section. All such
notices, requests, demands and other communications shall, when mailed or sent
by courier, respectively, be effective when deposited in the mails or delivered
by courier, respectively, addressed as aforesaid.
7.04.
Costs,
Expenses and Taxes.
. Each
of the parties hereto agrees to pay such party’s own fees and expenses in
connection with this Agreement, the Pledge Agreement Amendment, the Notes and
the transactions contemplated hereby or thereby, including, without limitation,
legal and accounting fees and expenses. The Company shall pay any and all stamp
and other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, the Pledge Agreement, the Notes and
the other instruments and documents to be delivered hereunder or thereunder
and
agrees to save the Purchaser harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and filing fees.
7.05.
Binding
Effect; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Company and
the
Purchaser and their respective successors and assigns, except that the Company
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Purchaser.
7.06.
Survival
of Representations and Warranties.
All
representations and warranties made in this Agreement, the Notes, or any other
instrument or document delivered in connection herewith or therewith, shall
survive the execution and delivery hereof or thereof and the making of the
loans.
7.07.
Prior
Agreements.
This
Agreement constitutes the entire agreement between the parties and supersedes
any prior understandings or agreements concerning the subject matter hereof,
including, without limitation, the Original Purchase Agreement, as amended
by
the Purchase Agreement Amendment. Notwithstanding the foregoing, the Existing
Purchasers acknowledge and agree that the Maturity Date of the Existing Notes
shall be November 30, 2007, as previously agreed by the Company and the Existing
Purchasers in the Purchase Agreement Amendment.
7.08.
Severability.
The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
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12
-
7.09.
Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York, without regard to conflicts of law provisions thereof.
7.10.
Headings.
Article, Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
7.11.
Sealed
Instrument.
This
Agreement is executed as an instrument under seal.
7.12.
Counterparts.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and each of the parties
hereto may execute this Agreement by signing any such counterpart.
7.13.
Further
Assurances.
From
and after the date of this Agreement, upon the request of the Purchaser, the
Company and each Subsidiary shall execute and deliver such instruments,
documents and other writings as may be necessary or desirable to confirm and
carry out and to effectuate fully the intent and purposes of this Agreement,
the
Pledge Agreement and the Notes.
7.14.
Appointment.
Purchasers
hereby irrevocably designates Spyglass Capital Partners, LLC as Collateral
Agent
(in such capacity, the “Collateral Agent”). Purchasers hereby irrevocably
authorizes the Collateral Agent to take such action on its behalf under the
provisions of this Agreement, the Pledge Agreement, the Account Control
Agreement and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of the Collateral Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
hereto and thereto. Purchasers hereby accepts the pledges, mortgages and
fiduciary assignments created for their benefit under the Pledge Agreement
and
empowers the Collateral Agent to enter into such agreements and act as
Collateral Agent on behalf and for the benefit of the Purchasers. The provisions
of this Section are solely for the benefit of the Collateral Agent and
Purchasers, and none of the Company nor any of its Subsidiaries or affiliates
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the
Collateral Agent shall act solely as agent of the Purchasers and the Collateral
Agent does not assume and shall not be deemed to have assumed any obligation
or
relationship of agency or trust with the Company, or for any of its Subsidiaries
or affiliates.
7.15.
Administration
of the Collateral. The
Collateral Agent shall administer the Collateral and any Lien thereon (as such
terms are defined in the Pledge Agreement) for the benefit of the Purchasers
in
the manner provided herein and in the Pledge Agreement; provided,
however,
that in
the event of conflict between the provisions relating to administration of
Collateral included in this Agreement and those included in the Pledge
Agreement, the latter shall prevail. The Collateral Agent shall exercise such
rights and remedies with respect to the Collateral as are granted to it
hereunder and under the Pledge Agreement and applicable law and as shall be
directed by the Purchasers. Upon payment in full of all obligations under this
Agreement and the Notes (including, without limitation, upon the conversion
of
the Notes in accordance with the terms herein), the Collateral Agent shall
promptly release any and all Liens, Collateral (as such terms are defined in
the
Pledge Agreement) and other security arrangements entered into in connection
with this Agreement and the Notes and the transactions contemplated hereby
and
thereby.
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7.16.
Reliance
by
Agents. The
Collateral Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, electronic mail, cablegram, radiogram,
order or other document, telephone message or other electronic form of
communication signed, sent or made by Purchasers and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Collateral Agent.
7.17.
Resignation
by the Agents. The
Collateral Agent may resign from the performance of all its respective functions
and duties hereunder and/or under Pledge Agreement and related documents at
any
time by giving 15 Business Days’ prior written notice to Purchasers and the
Company. Such resignation shall take effect upon the appointment of a successor
Collateral Agent.
7.18 Interest
Rate.
In no
event shall any interest to be paid under the Notes (including, without
limitation, any other fees or amounts deemed to be interest pursuant to law)
exceed the maximum rate permitted by law. In any such event, the Notes shall
automatically be deemed amended to permit interest charges (including, without
limitation, any other fees or amounts deemed to be interest pursuant to law)
at
an amount equal to, but no greater than, the maximum rate permitted by
law.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto duly authorized, as of the date first above
written.
| UNITED BENEFITS & PENSION SERVICES, INC. | ||
|
By:
|
/s/
Xxxxxxx Xxxxxxxxx
|
|
|
Xxxxxxx Xxxxxxxxx, CEO
|
||
|
PURCHASERS:
|
|||
|
SPYGLASS
CAPITAL PARTNERS LLC
|
/s/
Xxxxxx Xxxx
|
||
|
Xxxxxx
Xxxx, an individual
|
|||
|
By:
|
/s/
Xxxxxx Xxxx
|
||
|
Xxxxxx
Xxxx, Managing Member
|
/s/
Hyun Park
|
||
|
Hyun
Park, an individual
|
|||
|
/s/
Sun Xxxx
|
|||
|
Sun
Xxxx, an individual
|
|||
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14
-
|
/s/
Xxxxxxx Xxxx
|
||
|
Xxxxxxx
Xxxx, an individual
|
||
|
/s/
Xxxxx Xxxxx
|
||
|
Xxxxx
Xxxxx, an individual
|
||
|
/s/
Xxxxxxx Xxx
|
||
|
Xxxxxxx
Xxx, an individual
|
||
|
/s/
Xxxx Xxx
|
||
|
Xxxx
Xxx, an individual
|
Acknowledged
and agreed to solely with respect to Sections 7.14, 7.15, 7.16 and
7.17
SPYGLASS
CAPITAL PARTNERS LLC
|
By:
|
/s/
Xxxxxx Xxxx
|
|
Xxxxxx
Xxxx, Managing Member
|
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15
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SCHEDULE
A
TO
|
Purchaser
Name
|
Amount
|
|||
|
Xxxxxx
Xxxx
|
$
|
60,000
|
||
|
Hyun
Park
|
$
|
45,000
|
||
|
Sun
Xxxx
|
$
|
45,000
|
||
|
Xxxxxxx
Xxxx
|
$
|
15,000
|
||
|
Conifer
Networks, LLC
|
$
|
15,000
|
||
|
Spyglass
Capital Partners LLC
|
$
|
10,000
|
||
|
Xxxxxxx
Xxx
|
$
|
50,000
|
||
|
Xxxx
Xxx
|
$
|
50,000
|
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16
-
SCHEDULE
B
TO
|
Amount
|
||||
|
Xxxxxx
Xxxx
|
$
|
60,000
|
||
|
Hyun
Park
|
$
|
45,000
|
||
|
Sun
Xxxx
|
$
|
45,000
|
||
|
Xxxxxxx
Xxxx
|
$
|
15,000
|
||
|
$
|
15,000
|
|||
|
Spyglass
Capital Partners LLC
|
$
|
10,000
|
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17
-
EXHIBIT
1.01
FORM
OF SECURED CONVERTIBLE NOTE
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18
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