Document:

Unassociated Document

    FIRST
AMENDMENT TO MERGER AGREEMENT

     

    This
First Amendment to Merger Agreement (“Amendment”) is dated December 18, 2009 by
and among Galen Capital Corporation, a Nevada corporation (“GCC”), on the one
hand; and the GCC Merger Sub Corporation, a Nevada corporation (the “Merger
Sub”) and uKarma Corporation, a Nevada corporation (“uKarma”), on the other
hand.

     

    RECITALS

     

    WHEREAS, the parties to this
Amendment entered into a certain Merger Agreement dated October 15, 2009
(“Merger Agreement”); and

     

    WHEREAS, the parties to this
Amendment desire to amend the Merger Agreement as hereinafter
provided;

     

    AGREEMENT

     

    NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Amendment agree as follows:

     

    1. All
capitalized terms not defined herein shall have the respective meanings assigned
to them in the Merger Agreement.

     

    2. The
second sentence of Section 1.2 is hereby modified to read in its entirety as
follows:

     

    “This
Agreement may be terminated by any party if the Closing does not occur by May
15, 2010 provided such terminating party is not in breach of this
Agreement.”

     

    3. Section
1.8 is hereby modified to read as follows:

     

    “1.8           Payment
Advances.   GCC shall pay to uKarma an amount equal to
$475,000 (“Cash Payment”) which shall be due on or prior to
Closing.  The parties acknowledge that $175,000 of the Cash Payment
has already been paid to uKarma as a non-refundable deposit.  $100,000
of the Cash Payment shall be due and payable from GCC to uKarma on or before
December 31, 2009.  GCC shall pay uKarma an additional $100,000 of the
Cash Payment on or before January 30, 2010 and an additional $100,000 on or
before the later of (i) March 31, 2010 or (ii) the date that uKarma files its
Form 10-K for the fiscal year ended December 31, 2009.  GCC shall also
pay uKarma for all reasonable costs associated with uKarma’s Form 10-K filing
for the year ended December 31, 2009, including all legal, accounting, transfer
agent, and EDGAR filing agent costs.  All payments of the Cash Payment
shall be delivered via wire transfer by GCC to uKarma to a wire account
designated in writing by uKarma’s Chief Executive Officer.

     

    4. Section
5.7 is hereby modified to read as follows:

     

    “5.7           Audit.   GCC
shall have completed its consolidated audited financial statements for the
fiscal years ended December 31, 2009 and 2008 before May 15, 2010, and its
reviewed financial statements for each subsequent fiscal quarter after December
31, 2009 if required for the Form 8-K with respect to this
transaction.”

     

    5. This
Amendment shall be effective immediately.  Except as amended hereby,
the Merger Agreement shall continue in full force and effect in accordance with
its terms.

     

    IN WITNESS WHEREOF, the
parties have executed this Amendment as of the date set forth
above.

     

    
      
        	      
                Galen
      Capital Corporation, a Nevada corporation

              	 	 	      
                uKarma,
      Inc., a Nevada corporation

              	 
	 	 	 	 	 
	
                      
                  By: 
      /s/ William P
      Danielczyk 

                        
                    
      

                

                Name: William P
      Danielczyk  

              	 	 	
                      
                  By: 
      /s/ Bill Glaser 

                  
                    
      

                  Name:
      Bill
    Glaser

                

              	 
	
                      
                  Title: Chairman

                

              	 	 	
                      
                  Title:
      Chief Executive
      Officer

                

              	 

      

    

     

    
      
        	 	      
                GCC
      Merger Sub Corporation, a Nevada
    corporation

              	 
	 	 	 	 
	
              	
                By:  
      

              	/s/
      Bill Glaser 	 
	 	 	      
                Name: Bill Glaser

              	 
	 	 	      
                Title: Chief Executive OfficerNOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE BLACKHAWK FUND THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    
      	
              Principal
      Amount: $50,000

            	
              Issue
      Date: March 19, 2010

            

    

    

    CONVERTIBLE PROMISSORY
NOTE

    

    FOR VALUE
RECEIVED, THE BLACKHAWK FUND, a Nevada corporation (hereinafter individually and
collectively called "Borrower"), hereby promises to
pay to the order of Professional Offshore Opportunity Fund, LLC, 1400 Old
Country Road, Suite 206, Westbury, New York 11590, Fax: (516) 228-8083, (the
"Holder") or its
registered assigns or successors in interest or order, without demand, the sum
of Fifty Thousand Dollars ($50,000).  The aggregate principal amount
outstanding under this Note will be conclusively evidenced by the schedule
annexed as Exhibit B hereto (the “Loan Schedule”), up to a
maximum principal document of U.S $50,000.  The entire principal
amount hereunder shall be due and payable in full on March 19, 2015 (the “Maturity Date”), or on such
earlier date as such principal amount may earlier become due and payable
pursuant to the terms hereof.

     

    The
following terms shall apply to this Note:

     

    ARTICLE
I

    INTEREST;
REPAYMENT; CONVERSOIN

     

    1.1         Interest Rate.
Interest shall accrue on the unpaid principal amount of this Convertible
Promissory Note (the “Note”) at the rate of eight
percent (8%) per annum from the date of the first making of the loan for such
principal amount until such unpaid principal amount is paid in full or earlier
converted into shares (the “Shares”) of the Borrower’s
common stock, $0.0001 par value (the “Common Stock”) in accordance
with the terms hereof.  Interest hereunder shall be paid on the
Maturity Date or on such earlier date as the principal amount under this Note
becomes due and payable or is converted in accordance with the terms hereof and
shall be computed on the basis of a 360-day year for the actual number of days
elapsed.

     

    1.2         Principal Payments.
The outstanding principal amount is due and payable on the Maturity
Date.

     

    1.3         Liability of
Borrower.  Borrower is unconditionally, and without regard to
the liability of any other person, liable for the payment and performance of
this Note and such liability shall not be affected by an extension of time,
renewal, waiver, or modification of this Note or the release, substitution, or
addition of collateral for this Note.  Each person signing this Note
consents to any and all extensions of time, renewals, waivers, or modifications,
as well as to release, substitution, or addition of guarantors or collateral
security, without affecting Borrower’s liabilities hereunder.  Holder
is entitled to the benefits of any collateral agreement, guarantee, security
agreement, assignment, or any other documents which may be related to or are
applicable to the debt evidenced by this Note, as they now exist, may exist in
the future, have existed, and as they may be amended, modified, renewed, or
substituted.

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    1.4        Conversion

     

    (a)         Conversion of Principal and
Interest.  Subject to the terms and conditions hereof, the
Holder, at its sole option, may deliver to the Holder a notice in the form
attached hereto as Exhibit A (a “Conversion Notice”), at any
time and from time to time after the date hereof (the date of the delivery of a
Conversion Notice, a “Conversion Date”), to convert
all or any portion of the outstanding principal amount of this Note plus accrued
and unpaid interest thereon, for a number of Shares equal to the quotient
obtained by dividing the dollar amount of such outstanding principal amount of
this Note plus the accrued and unpaid interest thereon being convened by the
Conversion Price (as defined in Section 4.1).  Conversions hereunder
shall have the effect of lowering the outstanding principal amount of this Note
plus all accrued and unpaid interest thereunder in an amount equal to the
applicable conversion, which shall be evidenced by entries set forth in the
Conversion Notice.

     

    (b)         Certain Conversion
Limitations.

     

    (i)           The
Holder may not convert an outstanding principal amount of this Note or accrued
and unpaid interest thereon to the extent such conversion would result in the
Holder, together with any affiliate thereof, beneficially owning (as determined
in accordance with Section 13(d) of the Exchange Act (as defined in Section 4.1)
and the rules promulgated thereunder) in excess of 4.999% of the then issued and
outstanding shares of Common Stock.  Since the Holder will not be
obligated to report to Borrower the number of shares of Common Stock it may hold
at the time of a conversion hereunder, unless the conversion at issue would
result in the issuance of Shares in excess of 4.999% of the then outstanding
shares of Common Stock without regard to any other shares which may be
beneficially owned by the Holder or an affiliate thereof, the Holder shall have
the authority and obligation to determine whether and the extent to which the
restriction contained in this Section will limit any particular conversion
hereunder.  The provisions of this Section may be waived by the Holder
upon not less than 61 days’ prior notice to Borrower.

     

    (ii)      
   The Holder may not convert an outstanding principal amount of
this Note or accrued and unpaid interest thereon to the extent such conversion
would result in the Holder, together with any affiliate thereof, beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules promulgated thereunder) in excess of 9.999% of the then issued and
outstanding shares of Common Stock.  Since the Holder will not be
obligated to report to Borrower the number of shares of Common Stock it may hold
at the time of a conversion hereunder, unless the conversion at issue would
result in the issuance of Shares in excess of 9.999% of the then outstanding
shares of Common Stock without regard to any other shares which may be
beneficially owned by the Holder or an affiliate thereof, the Holder shall have
the authority and obligation to determine whether and the extent to which the
restriction contained in this Section will limit any particular conversion
hereunder.  The provisions of this Section may be waived by the Holder
upon not less than 61 days’ prior notice to Borrower.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    (iii)        The
Holder may not convert an outstanding principal amount of this Note or accrued
and unpaid interest thereon to the extent such conversion would require Borrower
to issue shares of Common Stock in excess of the Borrower’s then sufficient
authorized and unissued shares of Common Stock.

     

    ARTICLE
II

    EVENTS
OF DEFAULT

     

    The
occurrence of any of the following events of default ("Event of Default") shall, at
the option of the Holder hereof, make all sums of principal and interest then
remaining unpaid hereon and all other amounts payable hereunder immediately due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below and shall further entitle
Holder to exercise any and all remedies available to it under applicable
law:

     

    2.1         Failure to Pay
Principal.  The Borrower fails to pay the outstanding principal
amount or other sum due under this Note when due and such failure continues for
a period of 5 days after the due date.

     

    2.2         Breach of
Covenant.  The Borrower breaches any material covenant or other
term or condition of this Note or the Purchase Agreement in any respect and such
breach, if subject to cure, continues for a period of 10 days after written
notice to the Borrower from the Holder.

     

    2.3         Breach of Representations
and Warranties.  Any material representation or warranty of the
Borrower made herein, in the Purchase Agreement or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith or
therewith shall be false or misleading in any respect as of the date made and
the date hereof.

     

    2.4         Receiver or Trustee.
The Borrower shall make an assignment for the benefit of creditors, or apply for
or consent to the appointment of a receiver or trustee for them or for a
substantial part of their property or business; or such a receiver or trustee
shall otherwise be appointed.

     

    2.5         Bankruptcy.
Bankruptcy, insolvency, reorganization, or liquidation proceedings or other
proceedings or relief under any bankruptcy law or any law, or the issuance of
any notice in relation to such event, for the relief of debtors shall be
instituted by or against the Borrower and if instituted against them are not
dismissed within 45 days of initiation.

     

    ARTICLE
III

    COVENANTS

     

    So long
as any principal or interest is due hereunder and shall remain unpaid, Borrower
will, unless the Holder shall otherwise consent in writing:

     

    (a)         Maintain
and preserve its existence, rights and privileges;

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (b)         Not
(i) directly or indirectly sell, lease or otherwise dispose of (A) any of its
property or assets other than in its ordinary course of business or (B)
substantially all of its properties and assets, in the aggregate, to any
person(s), whether in one transaction or in a series of transactions over any
period of time, or (ii) adopt any plan or arrangement for the dissolution or
liquidation of Borrower;

     

    (c)         Give
written notice to Holder upon the occurrence of an Event of Default or any event
but for the giving of notice or lapse of time, or both, would constitute an
Event of Default within five (5) days of such event;

     

    (d)         Not
use the proceeds from the issuance of this Note in any way for any purpose that
entails a violation of, or is inconsistent with, Regulation U of the Board of
Governors of the Federal Reserve System of the United States of
America;

     

    (e)         Comply
in all material respects with all applicable laws (whether federal, state or
local and whether statutory, administrative or judicial or other) and with every
applicable lawful governmental order (whether administrative or
judicial);

     

    (f)          Not
take any action which would impair the rights and privileges of this Note set
forth herein or the rights and privileges of the holder of this
Note;

     

    (g)         Deliver
to the Holder quarterly financial statements within thirty (30) days after the
end of each quarter in form, scope and substance satisfactory to the Holder and
annual audited financial statements within ninety (90) days after the end of
each fiscal year; and

     

    (h)         If
at any time after September 10, 2009, there is either (i) insufficient Common
Stock to permit conversions by Holder pursuant to Section 1.5 or (ii) the Per
Share Market Value is less than the then existing par value of the Common Stock
for a  period of 5 consecutive Trading Days, Borrower  will
use its best efforts to amend its capital structure by means of either a reverse
split of its Common Stock, an increase in its authorized Common Stock or a
reduction of the par value of its Common Stock, or any combination of the
foregoing as determined by Borrower’s board of directors in its reasonable
discretion.

     

    ARTICLE
IV

    MISCELLANEOUS

     

    4.1         Definitions.  For
the purposes hereof, the following terms shall have the following
meanings:

     

    “Business Day” means
any day except Saturday, Sunday and any day which shall be a legal holiday or a
day on which banking institutions in the State of New York or State of Nevada
are authorized or required by law or other government action to
close.

    

    “Conversion Price”
shall be the greater of (i) the then existing par value of the Common Stock or
(ii) 75% of the average of the Per Share Market Values during the twenty (20)
Trading Days immediately preceding a Conversion Date.

    

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

    “Per Share Market
Value” means on any particular date (a) the closing bid price per share
of Common Stock on such date on the OTC Bulletin Board or on such Subsequent
Market on which the shares of Common Stock are then listed or quoted, or if
there is no such price on such date, then the closing bid price on the OTC
Bulletin Board or on such Subsequent Market on the date nearest preceding such
date, or (b) if the shares of Common Stock are not then listed or quoted on the
OTC Bulletin Board or a Subsequent Market, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the National
Quotation Bureau Incorporated or similar organization or agency succeeding to
its functions of reporting prices) at the close of business on such date, or (c)
if the shares of Common Stock are not then reported by the National Quotation
Bureau Incorporated (or similar organization or agency succeeding to its
functions of reporting prices), then the average of the “Pink Sheet” quotes for
the relevant conversion period, as determined in good faith by the
Holder.

    

    “Purchase Agreement”
means that certain Securities Purchase Agreement dated March 19, 2010 by and
between Borrower and Holder.

    

    “Securities Act” means
the Securities Act of 1933, as amended.

    

    “Subsequent Market”
means the New York Stock Exchange, American Stock Exchange, Nasdaq SmallCap
Market or Nasdaq National Market.

    

    “Trading Day” means
(a) a day on which the shares of Common Stock are traded on such Subsequent
Market on which the shares of Common Stock are then listed or quoted, or (b) if
the shares of Common Stock are not listed on a Subsequent Market, a day on which
the shares of Common Stock are traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (c) if the shares of Common Stock are not
quoted on the OTC Bulletin Board, a day on which the shares of Common Stock are
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that the
shares of Common Stock are not listed or quoted as set forth in (a), (b) and (c)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of Nevada are authorized or required by law or other government action to
close.

    

    4.2         Failure or Indulgence Not
Waiver. No failure or delay on the part of Holder hereof in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    4.3         Notices. All notices,
demands, requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise specified herein,
shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written
notice.  Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to Borrower to The Blackhawk Fund, 1802 N.
Carson Street, Suite 108, Carson City, NV 89701, Attention: Frank Marshik; with
a copy by telecopier only to: Indeglia & Carney, P.C., 1900 Main Street,
Suite 300, Irvine, CA 92614, Attention: Marc A. Indeglia, Esq., telecopier
number: (949) 861-3324, (ii) if to Holder, to the name, address and telecopy
number set forth on the front page of this Note.

     

    4.4         Amendment Provision.
The term "Note" and all
reference thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

     

    4.5         Assignability. This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.

     

    4.6         Cost of Collection.
If default is made in the payment of this Note, Borrower shall pay the Holder
hereof reasonable costs of collection, including reasonable attorneys’
fees.

     

    4.7         Governing Law. This
Note shall be governed by and construed in accordance with the laws of the State
of Nevada, without regard to conflicts of laws principles that would result in
the application of the substantive laws of another jurisdiction.  Any
action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only either in the Supreme Court
of New York, New York County, in the United States District Court for the
Southern District of New York, in the Superior Court of the State of California
for the County of San Diego, or in the United States District Court for the
Southern District of California.  Both parties and the individual
signing this Note on behalf of the Borrower agree to submit to the jurisdiction
of such courts.  The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In the event that
any provision of this Note is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Note. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action
against the Borrower in any other jurisdiction to collect on the Borrower’s
obligations to Holder or to enforce a judgment or other court in favor of the
Holder.

     

    4.8         Maximum Payments.
Nothing contained herein shall be deemed to establish or require the payment of
a rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest required to be paid or
other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Borrower
to the Holder and thus refunded to the Borrower.

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    4.9         Construction. Each
party acknowledges that its legal counsel participated in the preparation of
this Note and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Note to favor any party against the
other.

     

    IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by an authorized officer as of the
19th
day of March, 2010.

     

    
      
        
          
            	
                    BORROWER:

                  
	 
      
	
                    THE
      BLACKHAWK FUND

                  
	 
      
	
                    By:

                  	 
      
	 
      	
                    Name:
      Frank Marshik

                  
	 
      	
                    Title:
      President

                  

          

        

      

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    NOTICE
OF CONVERSION

     

    Dated:

     

    The undersigned hereby elects to
convert the principal amount and interest indicated below of the attached
Convertible Promissory Note into shares of common stock, $0.0001 par value (the
“Common Stock”), of The
Blackhawk Fund, according to the conditions hereof, as of the date written
below.  No fee will be charged to the holder for any
conversion.

     

    Exchange
calculations: ______________________________________________

    

    Date to
Effect Conversion: ___________________________________________

     

    Principal
Amount and Interest of

    Secured
Convertible Note to be Converted: ______________________________

    

    Number of
shares of Common Stock to be Issued: ________________________

     

    Applicable
Conversion Price:

     

    Signature:
__________________________________________

     

    Name:_____________________________________________

     

    Address:
___________________________________________

     

    -Exhibit
A-

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    LOAN
SCHEDULE

    

    Convertible
Promissory Note Issued by The Blackhawk Fund.

    

    Dated:
March 19, 2010

    

    SCHEDULE

    OF

    CONVERSIONS
AND PAYMENTS OF PRINCIPAL

     

    
      
        
          
            
              
                
                  	
                          Date
      of Conversion

                        	 
      	
                          Amount
      of Conversion

                        	 
      	
                          Total
      Amount Due

                          Subsequent

                          To
      Conversion

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