NOTE PURCHASE AGREEMENT between HQ FINANCIAL COPRORATION, as Issuer and BASS UNDERWRITERS, INC., as Purchaser dated as of March 1, 2021 AGREEMENT
between
HQ
FINANCIAL COPRORATION, as Issuer
and
BASS
UNDERWRITERS, INC., as Purchaser
dated
as of March 1, 2021
AGREEMENT
This
NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of March 1, 2021,
is entered into between HQ FINANCIAL CORPORATION, a Delaware
corporation (the "Issuer")
and BASS UNDERWRITERS, INC., a Florida corporation (the
"Purchaser").
Recitals
WHEREAS, Issuer has
issued and is the holder of thirty-five (35) notes, (the
"Notes"), in an aggregate
principal face amount of $5,261,110.89, as of the Closing Date, as
depicted in Exhibit A, which
is attached hereto; and
WHEREAS, the
Purchaser is willing, on the terms and subject to the conditions
hereinafter set forth, to purchase the Notes in an aggregate
outstanding amount, and at the Purchase Price set forth in Section
1.01(b); and
WHEREAS, the Issuer
intends to pledge all collateral it has received to secure the
Notes (the “Collateral”) to the Purchaser;
and
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto agree as
follows:
PURCHASE
AND SALE OF NOTES
Section
1.01
Purchase
and Sale of Notes.
(a) Purchase and Sale of Notes on the
Closing Date. Subject to the terms and conditions set forth
herein, on the Closing Date, the Issuer hereby agrees to sell to
the Purchaser and the Purchaser agrees to acquire from the Issuer,
free and clear of all Liens, the Notes in the aggregate initial
principal face amount of $5,261,110.89. The Issuer will not be
obligated to deliver any of the Notes to be delivered hereunder
except upon payment in full of the Purchase Price specified in
Section 1.01(b) hereof, for all of the Notes to be purchased as
provided herein.
(b) Purchase Price. The Notes will
be purchased at a price equal to 100% of the principal amount
thereof, payable on the Closing Date (the "Purchase Price").
(c) Payment of Purchase Price; Delivery of
Notes. Delivery of the Notes and payment therefor shall be
made at the offices of Purchaser, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 12:01 A.M., Eastern time, on the Closing
Date, or at such other time or place on the same or such other
date, not later than the three (3) business day thereafter, as the
Purchaser and the Issuer may agree upon in writing.
(d) Mechanics. The Notes shall be
delivered by the Issuer to the Purchaser at its headquarters upon
payment by the Purchaser of the Purchase Price specified in Section
1.01(b).
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section 2.01 Representations and Warranties of
the Issuer. The Issuer represents and warrants to, and
agrees with, the Purchaser that, as of the Closing
Date:
(a) Organization and Status. The
Issuer is duly organized and validly existing and in good standing
under the laws of its respective jurisdiction of
organization.
(b) Due Authorization and
Enforceability. It has the full right, power, and authority
to execute, deliver, and perform this Agreement and to undertake
all of the transactions contemplated hereby and thereby and has
taken all necessary action to authorize the execution, delivery,
and performance by it of this Agreement. When executed by all
parties, as applicable, and delivered, this Agreement will
constitute a legal, valid, and binding agreement, enforceable
against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium, and other laws of general
applicability relating to or affecting creditors rights generally,
and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
(c) No Consent. No consent,
license, approval, authorization or order of, or filing or
registration with, any court or governmental agency is required for
the issuance and sale of Notes or the execution, delivery, and
performance by it of its obligations under this
Agreement.
(d) No Conflict. The execution,
delivery, and performance of this Agreement do not, as of the
Closing Date, violate any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets,
or any contractual restriction binding on or affecting it or any of
its assets.
(e) Taxes. All taxes and other
governmental charges due in connection with the execution and
delivery of this Agreement and the transactions contemplated
hereby, and the execution, delivery, and sale of the Notes have
been or will be paid at or before the Closing Date.
(f) Solvency and Conduct of
Business. On and immediately after the Closing Date, the
Issuer (after giving effect to the issuance of the Notes and to the
other transactions related thereto as described in the Time of Sale
Package and the Final Offering Circular) will be
Solvent.
Section
2.02
Representations
and Warranties of Purchaser.
The
Purchaser represents and warrants to, and agrees with, the Issuer,
as of the Closing Date:
(a) Due authorization. It is duly
authorized and possesses the requisite corporate or company power
to enter into this ▇▇▇▇▇▇▇▇▇.▇▇ action. There is no action,
suit, or proceeding pending against or, to the knowledge of the
Purchaser, threatened against or affecting, the Purchaser before
any court or arbitrator or any government body, agency, or official
which could reasonably be expected to materially adversely affect
the ability of the Purchaser to perform its obligations under this
Agreement.
ARTICLE
III
CONDITIONS
PRECEDENT
Section 3.01 Conditions to Purchase. The
following shall be conditions precedent to the obligation of the
Purchaser to purchase the Notes on the Closing Date:
(a) Representations and Warranties.
The representations and warranties of the Issuer set forth or
referred to in Section 2.01 hereof shall be true and correct in all
material respects on the Closing Date as though made on and as of
the Closing Date (except for representations and warranties which
relate to a specific date, which shall be true and correct as of
such date).
(b) No Default. No event which
itself or with the giving of notice or lapse of time, or both,
would constitute an event of default hereunder shall have occurred
and be continuing on the Closing Date.
(c) Closing Deliverables. The
Purchaser shall have received on the Closing Date the following
items, each of which shall be in form and substance satisfactory to
the Purchaser: (i) an Officer's Certificate of the Issuer
confirming the satisfaction of the conditions set forth in clauses
(a) and (b) of this Section 3.01; (ii) resolutions of the Board of
Directors or such other similar decision-making committee (or an
authorized committee thereof), as applicable, of the Issuer with
respect to its authorization to enter into and perform its
obligations under this Agreement; and (iii) the Notes.
ARTICLE
IV
LIMITED
RECOURSE
Section
4.01
Non-Recourse
Obligation; Non-Petition By Purchaser
(a)
No Recourse. The
Purchaser acknowledges that, notwithstanding any other provisions
of this Agreement, no recourse shall be had for the payment of any
amount owing in respect of or arising in connection with this
Agreement against any asset of the Issuer or against any officer,
director, employee, shareholder, administrator, or incorporator of
the Issuer. This provision shall survive the termination of this
Agreement for any reason.
ARTICLE
V
MISCELLANEOUS
Section
5.01
Miscellaneous
Provisions.
(a) Notices. All notices and other
communications provided for herein shall be made in writing and
mailed by certified or registered mail, delivered by hand or
overnight courier service, or sent by facsimile as
follows:
|
If to
the Purchaser:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ President
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
|
If to
the Issuer:
|
▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Chief
Legal Officer
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices
mailed by certified or registered mail or sent by hand or overnight
courier service shall be deemed to have been given when received.
Notices sent by facsimile during the recipient's normal business
hours shall be deemed to have been given when sent (and if sent
after normal business hours shall be deemed to have been given at
the opening of the recipient's business on the next business day).
Any party hereto may change the address or facsimile number for
receipt of communications by giving written notice to the
others.
(b) Electronic Communications.
Notices and other communications hereunder may be sent by
electronic communication (including email and internet or intranet
websites) in accordance with procedures agreed by the parties
except to the extent that any party notifies the other party hereto
that it is incapable of receiving notices by electronic
communication.
(c) No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
either party to this Agreement, any right, remedy, power, or
privilege under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy,
power, or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power,
or privilege under this Agreement. The rights, remedies, powers,
and privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers, and privileges provided by
law.
(d) Survival of
Representations and Warranties. All representations and warranties
made under this Agreement (or in any amendment, modification, or
supplement hereto) and in any certificate delivered pursuant to
this Agreement shall survive the execution and delivery of this
Agreement.
(e) Governing
Law. This Agreement and any
claim, controversy, dispute, or cause of action (whether in
contract or tort or otherwise) based upon, arising out of,
or relating to this Agreement and the transactions contemplated
hereby shall be governed by, and construed in accordance with, the
laws of the State of South Carolina without regard to its conflict
of laws principles.
(f) Submission to Jurisdiction.
Each party hereto hereby irrevocably and unconditionally agrees
that it will not commence any action, litigation, or proceeding of
any kind whatsoever, whether in law or equity, or whether in
contract or tort or otherwise, in any way relating to this
Agreement or the transactions contemplated hereby, in any forum
other than the courts of the State of South Carolina sitting in
Berkeley County and any appellate court thereof, and each of the
parties hereto irrevocably and unconditionally submits to the
exclusive jurisdiction of such courts and agrees that any such
action, litigation, or proceeding may be brought in any such South
Carolina State court. Each of the parties hereto agrees that a
final judgment in any such action, litigation, or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(g) Waiver of Venue. Each party
hereto irrevocably and unconditionally waives, to the fullest
extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement in any such
court referred to in subsection (f) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such
court.
(h) Waiver of Jury Trial. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER
BASED ON CONTRACT, TORT, OR ANY OTHER THEORY. EACH PARTY HERETO (A)
CERTIFIES THAT NO AGENT, ATTORNEY, REPRESENTATIVE, OR ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT
OF LITIGATION, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
(i) Counterparts; Integration;
Effectiveness. This Agreement and any amendments, waivers,
consents, or supplements hereto may be executed in counterparts
(and by different parties hereto in different counterparts), each
of which shall constitute an original, but all taken together shall
constitute a single contract. This Agreement constitutes the entire
contract between the parties relating to the subject matter hereof
and supersedes any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as
provided in Section 3.01, this Agreement shall become effective
when it shall have been executed by the parties hereto and when the
Issuer shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns.
(j) Electronic Execution. The words
“execution,” “signed,”
“signature,” and words of similar import in this
Agreement shall be deemed to include electronic or digital
signatures or the keeping of records in electronic form, each of
which shall be of the same effect, validity, and enforceability as
manually executed signatures or a paper-based recordkeeping system,
as the case may be, to the extent and as provided for under
applicable law, including the Electronic Signatures in Global and
National Commerce Act of 2000 (15 U.S.C. § 7001 et seq.) or
any other similar state laws based on the Uniform Electronic
Transactions Act. Delivery of an executed counterpart of a
signature page to this Agreement in electronic format shall be
effective as delivery of a manually executed counterpart of this
Agreement.
(k) Headings. The headings in this
Agreement are for reference only and shall not affect the
interpretation of this Agreement.
(l) Severability. If any term or
provision of this Agreement is invalid, illegal, or unenforceable
in any jurisdiction, such invalidity, illegality, or
unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction. Upon such determination that
any term or other provision is invalid, illegal, or unenforceable,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
officers thereunto duly authorized.
HQ
Financial Corporation
By:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
Chief Executive Officer
Bass
Underwriters, Inc.
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
President