EXHIBIT 10.2
AMENDMENT AND AGREEMENT
This Amendment and Agreement (this "Amendment") is entered into as of
September__, 2007 (the "Effective Date"), by and among Mortgage Assistance
Center Corporation, a Florida corporation (the "Company"), and the undersigned
entities (each, an "Investor," and collectively, the "Investors"), and amends
that certain Series A Preferred Stock and Common Stock Warrant Purchase
Agreement dated as of November 30, 2006, by and among the Company and the
Investors (the "Purchase Agreement"). Messrs. William G. Payne and Rod Cain
Jones (collectively, the "Board Member Investors") are also party to this
Amendment for the limited purpose of Section 1.5. The Company, the Investors and
the Board Member Investors may each be referred to herein as a "Party" and
collectively as the "Parties."
BACKGROUND
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A. The Purchase Agreement provides, among other things, for the purchase by
the Investors of 1,500,000 shares of the Company's Series A Preferred Stock, par
value $.001 per share ("Series A Stock"), plus an additional 1,500,000 shares of
Series A Stock in three subsequent tranches, subject to the Company's
achievement of certain quarterly performance thresholds (each a "Threshold").
B. Notwithstanding that the Company did not meet the Threshold for March
31, 2007, the Investors waived the Threshold requirement and purchased the first
subsequent tranche of 500,000 shares of Series A Stock.
C. The Company has not met the Threshold for June 30, 2007 and, due to
certain irregularities in the management of its real estate portfolios, of which
the Investors have been made aware, Investors have advised the Company that no
future purchases of Series A Stock would be made under the terms of the Purchase
Agreement.
D. The Investors are, however, willing to invest an additional $1,000,000
in equity into the Company, and the Company is willing to accept such
investment, upon the terms and conditions set forth in this Amendment.
AGREEMENTS:
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In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows. Capitalized terms used, but not
defined herein have the respective meaning given such terms in the Purchase
Agreement.
SECTION 1
Authorization and Sale of Common Stock
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1.1. Authorization. In addition to the shares of Series A Stock and
warrants to purchase shares of the Company's common stock, $.001 par value per
share ("Common Stock") provided for under Section 1.1 of the Purchase Agreement,
the Company has, subject to the effectiveness of the Articles of Amendment (as
defined below) authorized the sale and issuance to the Investors of 267,347,556
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shares (the "Shares") of Common Stock. The Parties acknowledge that, at the
Effective Date, the Company does not have a sufficient number of authorized but
unissued shares of Common Stock to fulfill its obligations under this Agreement,
and will, prior to the issuance of the Shares, need to file an amendment to its
Articles of Incorporation to increase its authorized shares.
1.2. Sale and Issuance of Shares. Section 1.2 of the Purchase Agreement is
hereby amended to remove any future obligation on the part of the Investors to
purchase shares of Series A Stock or Warrants. In lieu thereof, but subject to
the terms and conditions of this Amendment, each of the Investors agrees,
severally and not jointly, to purchase, and the Company agrees to sell and issue
to each Investor the number of Shares set forth in the Column designated "Number
of Shares" opposite such Investor's name on the attached Schedule of Investors.
1.3. Purchase Price. The aggregate purchase price for Shares shall consist
of cash in the amount of $1,000,000 (the "Cash Consideration"), plus
cancellation of all outstanding Warrants. The Cash Consideration shall be due
and payable as follows:
(a) $500,000 was paid by wire transfer of immediately available
funds into an account designed in writing by the Company, as of
____________________; and
(b) $500,000 shall be due in payable, by wire transfer of
immediately available funds into an account designed in writing by the Company,
on November 30, 2007.
Within five (5) business days of the issuance of the Shares to the Investors,
the Investors shall deliver to the Company originals of all certificates
representing the Warrants for cancellation by the Company.
1.4. Delivery of Shares. On or before the second (2nd) business day
following the effectiveness of the Articles of Amendment, the Company will issue
to the Investors certificates, registered in such Investor's name, representing
the number of Shares that such Investor is purchasing as set forth in the
Schedule of Investors.
1.5. Termination of Board Warrants. Subject to the issuance of the Shares,
the Parties agree that the warrants to purchase 75,000 shares held by each of
the Board Member Investors (the "Board Warrants") are, as of the Effective Date,
hereby amended to provide that they can only be exercised upon the occurrence of
an Event of Default described below. Absent the occurrence of an Event of
Default, the Board Warrants cannot be exercised.
SECTION 2
Representations and Warranties
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2.1. Company Representations and Warranties. Except as set forth on the
Schedule of Exceptions attached hereto as Exhibit A, which disclosures and
exceptions will be deemed to be a part of the representations and warranties
made hereunder, the Company hereby restates all of the representations and
warranties set forth under Section 3 of the Purchase Agreement.
2.2. Investor Representations and Warranties. The Investors hereby restate
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all of the representations and warranties set forth under Section 4 of the
Purchase Agreement.
SECTION 3
Other Obligations
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3.1. Articles of Amendment. The Company, as soon as reasonably practicable,
shall prepare, execute and file with the Securities and Exchange Commission and
the State of Florida, all applicable reports, statements, acknowledgements,
amendments and such other documentation as may be required, including, but not
limited to, any preliminary and definitive Information Statements and Forms 8-K,
to effect the Articles of Amendment, so as to enable the Company to issue the
Shares. The Company represents and warrants to the Investors that, as of the
Effective Date, its Board of Directors has approved an amendment to its Articles
of Incorporation increasing the number of authorized shares of Common Stock from
50,000,000 to 500,000,000 (the "Articles of Amendment"), and that it has
received consents from the holders of a sufficient number of shares of its
outstanding Common Stock as required by Florida law to effectuate the Articles
of Amendment.
3.2. Funding Commitment Agreement. Simultaneously with, and as a condition
to, the execution of this Agreement, the Company has executed that certain
Funding Commitment Agreement providing, among other things, that Bob Mangold
shall receive common stock purchase warrants for ___________ shares of Common
Stock in exchange for (a) a $300,000 short term loan, and (b) continued debt and
equity financing to fund the Company's acquisition of real estate loan
portfolios on the terms and subject to the conditions set forth in such
agreement.
3.3. Loan and Security Interest. Until such time as the Shares are issued
as provided herein, the $1,000,000, or such portion thereof as has then been
invested in the Company pursuant to Section 1.2 above shall be deemed to be a
non-interest bearing loan to the Company, payable on demand at any time after
the expiration of three months from the Effective Date, and the Company hereby
grants to the Investors a security interest in and to all of the Company's
assets, subject only to purchase money security interests granted by the Company
prior to the Effective Date in and to the real estate loan portfolios set forth
in the attached Exhibit B.
SECTION 4
Event of Default
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4.1. Event of Default. Each of the following shall be deemed to be an Event
of Default under this Amendment:
(a) The Company shall fail to prepare and file with the Securities
and Exchange Commission (the "SEC"), within ten (10) business days of the
Effective Date, a preliminary Information Statement meeting the requirements of
Regulation 14C promulgated under the Exchange Act of 1934, as amended (the
"Regulation 14C");
(b) The Company shall fail to file with the SEC a definitive
Information Statement meeting the requirements of Regulation 14C within eleven
(11) business days after the latter of (i) the filing of the preliminary
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Information Statement, and (ii) the receipt of comments by the Company from the
SEC with respect to the preliminary Information Statement,
(c) The Company shall fail to file, on or before the twenty-fifth
(25th) calendar day after filing the definitive Information Statement with the
SEC, the Articles of Amendment with the Secretary of State of the State of
Florida, the Articles of Amendment; and
(d) The Company shall fail to issue and deliver the Shares to the
Investors in accordance with Section 1.4above.
Upon the occurrence of an Event of Default, the Investors may, in addition to
any other right and remedy they may have, declare a default under the loan and
foreclose on the security interest contemplated under Section 3.3 above.
Miscellaneous
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4.2. Incorporation by Reference. Article 7 and Sections 9.1-9.16 of the
Purchase Agreement are incorporated into this Agreement by this reference as if
such sections had been fully set forth in this Agreement.
This Amendment and Agreement is executed as of the Effective Date.
THE COMPANY
MORTGAGE ASSISTANCE CENTER
CORPORATION, a Florida corporation
By: /s/ Ron Johnson
Ron Johnson, President
INVESTORS:
W.C PAYNE INVESTMENTS, LLC
By: W.C. Payne
W.C. Payne, Managing Member
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FAX/MACC, L.P.
By: Family Access Exchange II, L.P.
General Partner
By: FAX GenPar, L.L.C.
General Partner
By: /s/ Rod Cain Jones
Rod Cain Jones, President
For the limited purpose of Section 1.5 above:
/s/ William G. Payne
William G. Payne
/s/ Rod Cain Jones
Rod Cain Jones
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