AGREEMENT (this “Agreement”) is entered as of January 21, 2010, among United Energy Corp., a Nevada corporation (the “Company”), Ronald Wilen (“Wilen”), and Hilltop Holding Company, L.P., a Delaware limited partnership (“Hilltop”).
EXHIBIT
10.1
AGREEMENT
(this “Agreement”) is
entered as of January 21, 2010, among United Energy Corp., a Nevada corporation
(the “Company”), Xxxxxx
Xxxxx (“Xxxxx”), and Hilltop
Holding Company, L.P., a Delaware limited partnership (“Hilltop”).
WHREAS, the Company previously issued
to Xxxxx (a) its 12% Promissory Note, dated as of March 13, 2009, in the
original stated principal amount of $50,000.00 (as amended, the “Xxxxx March Note”),
(b) pursuant to the Agreement, dated as of May 13, 2009 (the “May Agreement”),
among the Company, Xxxxx, Xxxxxx Xxxxxxxxx (“Xxxxxxxxx”), Xxxx
Xxxxxx (“Silver”) and
Sherleigh Associates Inc. Profit Sharing Plan, its Secured Convertible
Promissory Note, dated as of May 13, 2009, in the stated principal amount of
$50,000 (as amended, the “Xxxxx May Note”), and
(c) pursuant to the Agreement, dated as of October 13, 2009 (the “October Agreement”),
among the Company, Xxxxx, Xxxxxxxxx and Silver, its Secured Convertible
Promissory Note, dated as of July 29, 2009, in the stated principal amount of
$50,000 (the “Xxxxx
July Note”, and collectively, the “Xxxxx
Notes”);
WHEREAS, the Company previously issued
to Xxxxxxxxx (a) its 12% Promissory Note, dated as of March 23, 2009, in the
original stated principal amount of $50,000.00 (as amended, the “Xxxxxxxxx March
Note”), (b) pursuant to the May Agreement, its Secured Convertible
Promissory Note, dated as of May 13, 2009, in the stated principal amount of
$50,000 (the “Xxxxxxxxx May Note”),
and (c) pursuant to the October Agreement, its Secured Convertible Promissory
Note, dated as of August 13, 2009, in the stated principal amount of $50,000
(the “Xxxxxxxxx August
Note”, and collectively, the “Xxxxxxxxx
Notes”);
WHEREAS, the Company previously issued
to Hilltop (a) pursuant to the May Agreement, its Secured Convertible Promissory
Note, dated as of May 13, 2009, in the stated principal amount of $101,016.67
(as amended, the “Hilltop May Note”),
which note was originally issued erroneously to Silver, and (b) pursuant to the
October Agreement, its Secured Convertible Promissory Note, dated as of August
27, 2009, in the stated principal amount of $50,000 (the “Hilltop August Note”,
and collectively the “Hilltop Notes”) (the
Xxxxx Notes, the Xxxxxxxxx Notes and the Hilltop Notes are collectively referred
to herein as the “Existing
Notes”);
WHEREAS, pursuant to the May Agreement,
(a) the Xxxxx March Note was amended and restated as the Amended and Restated
12% Secured Convertible Promissory Note, dated as of May 13, 2009, in the stated
principal amount of $51,016.67, and (b) the Xxxxxxxxx March Note was amended and
restated as the Amended and Restated 12% Secured Convertible Promissory Note,
dated as of May 13, 2009, in the stated principal amount of
$50,850.00;
WHEREAS, pursuant to the Agreement to
Amend Promissory Note, dated as of July 13, 2009 (the “July Agreement”),
among the Company, Xxxxx, Xxxxxxxxx and Silver, the Xxxxx March Note, the Xxxxx
May Note, the Xxxxxxxxx March Note, the Xxxxxxxxx May Note and the Hilltop May
Note were amended to extend the maturity date thereof;
WHEREAS, pursuant to the October
Agreement, the Xxxxx March Note, the Xxxxx May Note, the Xxxxxxxxx March Note,
the Xxxxxxxxx May Note and the Hilltop May Note were further amended to, inter alia, extend the
maturity date thereof to January 29, 2010;
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WHEREAS, pursuant to the Agreement,
dated as of January 29, 2010 (the “January Agreement”),
among the Company, Xxxxx, Hilltop and Xxxxxxxxx, each of the Existing Notes were
further amended to, inter
alia, extend the maturity date thereof to January 31, 2011;
WHEREAS, pursuant to a Securities
Purchase Agreement, dated as of January 10, 2011, between Hilltop and Xxxxxx
Xxxxxxxxx as Executrix of the Estate of Xxxxxx Xxxxxxxxx, Hilltop has acquired
all of the Xxxxxxxxx Notes and all of Xxxxxxxxx’x rights under the Security
Agreement, the Patent Security Agreement and the Intercreditor Agreement (as
such terms are defined below);
WHEREAS, the Company, Xxxxx, Hilltop
and Xxxxxxxxx desire to further extend the maturity date of the Existing Notes,
upon the terms and conditions stated in this Agreement;
WHEREAS, Hilltop desires to purchase,
upon the terms and conditions stated in this Agreement, (a) the Company’s
Secured Convertible Promissory Note (the “New Note”),
substantially in the form attached hereto as Exhibit A, in the
principal amount of $100,000.00, and (b) warrants (the “New Warrants”),
substantially in the form attached hereto as Exhibit B, to acquire
1,111,111 shares of the Company’s Common Stock;
WHEREAS, subject to the terms and
conditions stated in this Agreement, Hilltop may at its option purchase and the
Company will be require to sell (a) additional New Notes in the principal amount
of up to $100,000.00, and (b) additional New Warrants to acquire up
to 1,111,111 shares of the Company’s Common Stock; and
WHEREAS, the parties hereto desire to
amend (a) the Security Agreement, dated as of May 13, 2009, among Xxxxx, Hilltop
and Xxxxxxxxx (as amended by the October Agreement, the “Security Agreement”),
(b) the Amended and Restated Patent Security Agreement, dated as of October 31,
2009, among Xxxxx, Hilltop and Xxxxxxxxx (the “Patent Security
Agreement”), and (c) the Intercreditor Agreement, dated as of May 13,
2009, among Xxxxx, Hilltop and Xxxxxxxxx (as amended by the October Agreement,
the “Intercreditor
Agreement”), to include the obligations under the New Note and to reflect
Hilltop’s acquisition of the Xxxxxxxxx Notes.
NOW, THEREFORE, the Company, Xxxxx and
Hilltop hereby agree as follows:
1. Purchase of New Note and New
Warrants.
a. Initial
Closing. The Company shall issue and sell to Hilltop, and
Hilltop agrees to purchase from the Company (a) the New Notes in the original
principal amount of $100,000.00 (the “Initial New Notes”),
and (b) the New Warrants to purchase 1,111,111 shares of the Company’s Common
Stock at an initial exercise price of $0.11 per share (the “Initial Warrants”),
for an aggregate purchase price of $100,000.00, which amount has been paid by
Hilltop to the Company on January 3, 2011 (the “Initial
Closing”).
b. Additional
Closings. Subject to the satisfaction (or waiver) of the
conditions set forth in Section 8.b, at the
option of Hilltop, the Company shall issue and sell to Hilltop at multiple
closings, if applicable, and Hilltop may purchase from the Company (a)
additional New Notes in the principal amount of up to $100,000.00 (the “Additional New
Notes”), and (b) for each $10,000.00 of Additional New Notes purchased,
additional New Warrants to purchase 111,111 shares of the Company’s Common Stock
at an initial exercise price of $0.11 per share (the “Additional
Warrants”), for an aggregate purchase price equal to the principal amount
of the Additional New Notes purchased (each an “Additional
Closing”).
2
2. Amendment to Existing
Notes. Each of the Existing Notes is hereby amended, as
follows:
a. Extension of Maturity
Date. To extend the maturity date thereof from January 31,
2011 to December 20, 2011; and
b. Amendment to Prepayment
Provisions. By deleting the last sentence of the first
paragraph thereof, and insert in lieu thereof the following:
The
Debtor shall have the right to prepay all or any portion of this Note without
the consent of the Holder; provided, (a) such
prepayment is approved by the majority of the members of the Debtor’s board of
directors who are not beneficial owners of any portion the Existing Notes or the
New Note (as such terms are defined in that certain agreement, dated as of
January 21, 2011, among the Debtor and certain of the holders of the Debtor’s
promissory notes due December 20, 2011); (b) any such prepayment is made on a
pro rata basis on the
aggregate outstanding principal amount of all Existing Notes and of the New
Note; (c) the Debtor provides at least ten (10) business days prior written
notice of such prepayment, specifying the amount of such prepayment and the date
fixed for such prepayment; and (d) upon receipt of such prepayment notice, the
Holder may convert, in lieu of such prepayment, at any time prior to the date
fixed for such prepayment, all or any part of the principal amount and accrued
and unpaid interest designated by the Company for prepayment.
3. Amendments to Security
Agreement. The first “Whereas” clause of the Security
Agreement is hereby amended and restated in its entirety to state, as
follows:
WHEREAS,
the Secured Parties are the holders of (a) the Debtor’s Amended and Restated 12%
Secured Convertible Promissory Notes, dated as of May 13, 2009, in the aggregate
principal amount of $101,866.67 (the “Original Notes”), (b)
the Debtor’s Secured Convertible Promissory Notes, dated as of May 13, 2009, in
the aggregate principal amount of $201,016.67 (the “May Notes”), (c) the
Debtor’s Secured Convertible Promissory Notes, dated as of July 29, 2009 through
August 27, 2009, in the aggregate principal amount of $150,000.00 (the “August Notes”), and
(d) the Debtor’s Secured Convertible Promissory Note, dated as of January 3,
2011, in the original principal amount of $100,000.00 (the “January
Note”);
WHEREAS,
pursuant to that certain Agreement, dated as of January 21, 2011, by and among
the Company and the Secured Parties, the Debtor may issue and Hilltop Holding
Company, L.P. may purchase in the future additional Secured Convertible
Promissory Notes in the principal amount of up to $100,000.00 (the “Future Notes”, and
together with the Original Notes, the May Notes the August Notes and the January
Note, the “Notes”);
4. Amendments to Patent
Security Agreement. The first and second “Whereas” clauses of
the Patent Security Agreement is hereby amended and restated in its entirety to
state, as follows:
WHEREAS,
the Secured Parties are the holders of (a) the Grantor’s Amended and Restated
12% Secured Convertible Promissory Notes, dated as of May 13, 2009, in the
aggregate principal amount of $101,866.67 (the “Original Notes”), (b)
the Grantor’s Secured Convertible Promissory Notes, dated as of May 13, 2009, in
the aggregate principal amount of $201,016.67 (the “May Notes”), (c) the
Grantor’s Secured Convertible Promissory Notes, dated as of July 29, 2009
through August 27, 2009, in the aggregate principal amount of $150,000.00 (the
“August
Notes”), and (d) the Grantor’s Secured Convertible Promissory Note, dated
as of January 3, 2011, in the original principal amount of $100,000.00 (the
“January
Note”)
WHEREAS,
pursuant to that certain Agreement, dated as of January 21, 2011, by and among
the Grantor and the Secured Parties, the Debtor may issue and Hilltop Holding
Company, L.P. may purchase in the future additional Secured Convertible
Promissory Notes in the principal amount of up to $100,000.00 (the “Future Notes”, and
together with the Original Notes, the May Notes the August Notes and the January
Note, the “Notes”);
3
WHEREAS,
the Grantor has executed and delivered a Security Agreement, dated as of May 13,
2009, as amended by the Agreement, dated as of October 13, 2009, and by the
Agreement, dated as of January 21, 2011 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the “Security Agreement”),
among the Grantor and the Secured Parties;
5. Amendments to Intercreditor
Agreement.
a. The first
“Whereas” clause of the Intercreditor Agreement is hereby amended and restated
in its entirety to state, as follows:
WHEREAS,
the Creditors are the holders of (a) the Debtor’s Amended and Restated 12%
Secured Convertible Promissory Notes, dated as of May 13, 2009, in the aggregate
principal amount of $101,866.67 (the “Original Notes”), (b)
the Debtor’s Secured Convertible Promissory Notes, dated as of May 13, 2009, in
the aggregate principal amount of $201,016.67 (the “May Notes”), (c) the
Debtor’s Secured Convertible Promissory Notes, dated as of July 29, 2009 through
August 27, 2009, in the aggregate principal amount of $150,000.00 (the “August Notes”), and
(d) the Debtor’s Secured Convertible Promissory Note, dated as of January 3,
2011, in the original principal amount of $100,000.00 (the “January Note”), in
the respective principal amounts set forth on Schedule A annexed hereto, which
Notes have been issued by United Energy Corp. a Nevada corporation (the “Debtor”);
WHEREAS,
pursuant to that certain Agreement, dated as of January 21, 2011, by and among
the Company and the Creditors, the Debtor may issue and Hilltop Holding Company,
L.P. may purchase in the future additional Secured Convertible Promissory Notes
in the principal amount of up to $100,000.00 (the “Future Notes”, and
together with the Original Notes, the May Notes the August Notes and the January
Note, the “Notes”);
4
b. Schedule
A to Intercreditor Agreement is hereby amended and restated in its entirety in
the form attached hereto as Exhibit
C.
6. Assignment and Assumption of
Note Documents by Hilltop. The Company, Xxxxx and Hilltop
hereby acknowledge and agree that Hilltop has been assigned all of Xxxxxxxxx’x
rights, and has assumed all of Xxxxxxxxx’x obligations, under the Security
Agreement, the Patent Security Agreement and the Intercreditor Agreement, and as
a result thereof, Xxxxxxxxx is no longer a party to the Security Agreement, the
Patent Security Agreement and the Intercreditor Agreement.
7. Warrants. In
consideration for the extension of the maturity date of each of the Existing
Notes, the Company shall issue to each of Xxxxx and Hilltop, Warrants (the
“Warrants”) to
purchase the number of shares of Common of the Company set forth below next to
each such holder’s name. Such Warrants shall be exercisable for a
period of five (5) years, at an initial exercise price of $0.11 per share, and
shall be substantially in the form of the New Warrants.
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Holder’s Name
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Number
of
Warrant Shares
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Xxxxxx
Xxxxx
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1,984,939
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Hilltop
Holding Company, L.P.
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3,959,894
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8. Closing.
a. Initial Closing. The
Initial Closing shall be on such date and time (the “Initial Closing
Date”) as is mutually agreed to by the Company and
Hilltop. The Closing shall be conditioned upon receipt by the company
of Anti-Dilution Waivers from the holders of Series A Convertible Preferred
Stock upon terms acceptable to the Company in its sole discretion.
b. Additional
Closing. Each Additional Closing shall be on the date and time
specified in the Additional Closing Notice (as defined below) (an “Additional Closing
Date”) (or such later date as is mutually agreed to by the Company and
Hilltop). At any time prior to June 30, 2011, Hilltop may purchase, at Hilltop’s
option, Additional New Notes and related Additional Warrants by delivering a
written notice to the Company (the “Additional Closing
Notice”) at least three business days prior to the Additional Closing
Date set forth in the Additional Closing Notice. The Additional
Closing Notice shall set forth (i) the principal amount of Additional New Notes
(which amount shall be in increments of $10,000.00) and the number of related
Additional Warrants Hilltop will purchase and (ii) the Additional Closing
Date.
9. Miscellaneous.
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a. Notation on Existing
Notes. Immediately following the Initial Closing, each of
Xxxxx and Hilltop shall deliver to the Company the original Existing Notes
beneficially owned by such party so that the Company may place a legend on the
face thereof to indicate that each such Existing Note has been amended by this
Agreement, as well as the July Agreement, the October Agreement and the January
Agreement.
b. Amendments and
Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the parties
hereto.
c. Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
d. Entire
Agreement. This Agreement, including the exhibits and
schedules hereto, constitutes the entire agreement among the parties hereof with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.
e. Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
f. Applicable Law and
Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
g. Counterparts. This
Agreement may be executed by fax transmission and in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
h. Notice. For
the purpose of this Agreement, notices and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the Schedule of Purchasers, provided that all notices to the Company shall be
directed to the President and to the Chairman of the Company at 000 Xxxxxxxxxxx
Xxxxxxx, Xxxxxxxx, XX 00000, or to such other address as a party may have
furnished to the others in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
[signature
page follows]
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IN WITNESS WHEREOF, the Company, Xxxxx
and Hilltop have caused this Agreement to be duly executed as of the date first
written above.
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UNITED
ENERGY CORP.
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By:
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/s/ Xxxxxx
Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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President
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/s/ Xxxxxx
Xxxxx
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Xxxxxx
Xxxxx
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HILLTOP
HOLDING COMPANY, L.P.
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By:
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/s/ Xxxx
Xxxxxx
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Name:
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Xxxx
Xxxxxx
|
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Title:
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Managing
Partner
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