Document:

amacore_8k-ex1003.htm

Exhibi 10.3

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

THE AMACORE GROUP, INC.

 

 

AMENDED AND RESTATED 15% SENIOR SECURED CONVERTIBLE NOTE

 

Due June 30, 2012

 

	
Place of Issue: Maitland, Florida

	
Principal Amount: $______________

	
Original Issue Date: August 16, 2010

	
Note No.: SSCN- ___

 

FOR VALUE RECEIVED, upon the terms and subject to the conditions set forth in this amended and restated senior secured convertible note (this “Note”), THE AMACORE GROUP, INC., a Delaware corporation (the “Company”), absolutely and unconditionally promises to pay to the order of VICIS CAPITAL MASTER FUND (the “Holder”), upon due presentation and surrender of this Note, on June 30, 2012 (the “Maturity Date”), the principal amount of ____________________________ ($________________.00) and accrued interest thereon as hereinafter provided.  This Note is issued in connection with a certain Securities Purchase Agreement, dated as of June 2, 2011, between the Company and the Holder on even date thereof, and amends and restates that certain senior secured convertible note issued on August 16, 2010 (the “Original Issue Date”) in connection with a certain Securities Purchase Agreement, dated as of August 16, 2010, between the Company and the Holder (the “Purchase Agreement”), all terms of which are incorporated herein by this reference and hereby made a part of this Note.  Capitalized terms not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement.

 

 

  

 

  

 

ARTICLE I

PAYMENT OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT

 

1.1           Payment of Principal.  Payment of the principal of this Note (and any interest accrued thereon) shall be made in U.S. dollars in immediately available funds.  This Note may be prepaid at any time so long as all principal and interest due through the Maturity Date of the Note are paid.

 

1.2           Payment of Interest.  Simple interest shall accrue daily beginning on the Original Issue Date of this Note on the unpaid portion of the principal amount from time to time outstanding at the rate of fifteen percent (15%) per annum (the “Stated Interest Rate”).  All such interest accrued as of the Outside Conversion Date (as defined below) shall become payable to the Holder on the Outside Conversion Date, and all such interest accruing but unpaid thereafter shall become payable to the Holder on the Maturity Date.  Interest shall be paid in U.S. dollars in immediately available funds.

 

1.3           Payment on Non-Business Days.  If the outstanding principal and/or accrued but unpaid interest under this Note becomes due and payable on a Saturday, Sunday or public holiday under the laws of the State of New York, the due date hereof shall be extended to the next succeeding full business day and interest shall be payable at the rate of fifteen (15%) percent per annum during such extension.  All payments received by the Holder shall be applied first to the payment of all accrued interest payable hereunder.

 

1.4           Late Fee.  In the event any payment of principal or interest or both shall remain unpaid for a period of ten (10) days or more after the due date thereof, a one-time late charge equivalent to six percent (6%) of each unpaid amount shall be charged.

 

1.5           Adjustment of Stated Interest Rate.

 

(a)           After an Event of Default and acceleration of the Maturity Date by the Holder the Stated Interest Rate shall be adjusted to a rate of eighteen percent (18%) per annum, subject to the limitations of applicable law.

 

(b)           Regardless of any other provision of this Note or other Transaction Document, if for any reason the interest paid should exceed the maximum lawful interest, the interest paid shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of this Note and not to the payment of interest, and (ii) if the loan evidenced by this Note has been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of this Note or the refunding of excess to be a complete settlement and acquittance thereof.

 

ARTICLE II

GUARANTY AND SECURITY

 

All of the obligations of the Company under this Note are secured pursuant to the terms of that certain Amended and Restated Security Agreement, dated June 2, 2011, between the Company and the Holder, which Agreement amends and restates that certain Security Agreement dated as of August 16, 2010 between the Company and the Holder. In addition, all of the obligations of the Company under this Note are guaranteed by certain of the Company’s subsidiaries pursuant to the terms of that certain Amended and Restated Guaranty Agreement dated June 2, 2011, (the “Subsidiary Guaranty”) amending and restating that certain Guaranty Agreement dated August 16, 2010, and all of the obligations of such subsidiaries under the Subsidiary Guaranty are secured pursuant to the terms of that certain Amended and Restated Guarantor Security Agreement, dated June 2, 2011, amending and restating that certain Guarantor Security Agreement dated August 16, 2010.

 

  

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ARTICLE III

 

3.1           Conversion.  Holders of this Note shall have the conversion rights as follows.

 

(a)           Right to Convert.  All or any portion of the outstanding principal balance and accrued but unpaid interest under this Note shall be convertible, at the option of the holder thereof, at any time on or before June 30, 2011 (the “Outside Conversion Date”), and without the payment of additional consideration by the holder thereof, into such number of fully-paid and nonassessable shares of Class A Common Stock (the “Common Stock”), par value $.001 per share, at a Conversion Price in effect at the time of conversion.  The “Conversion Price” shall initially be $0.005 per share; provided, however, that the Conversion Price shall be subject to adjustment as provided in Section 3.2 below.

 

(b)           Holders shall effect conversions by providing the Company with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the amount of this Note to be converted and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the Company (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Company is deemed delivered hereunder.

 

(c)           Mechanics of Conversion.

 

(i)           Delivery of Certificate Upon Conversion. Not later than five Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the converting Holder a certificate or certificates which, on or after the effective date of a registration statement filed pursuant to the Registration Rights Agreement (the “Effective Date”), shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Transaction Documents) representing the number of shares of Common Stock being acquired upon the conversion of this Note. On or after the Effective Date, the Company shall, upon request of such Holder, use its reasonable efforts to deliver any certificate or certificates required to be delivered by the Company under this Section electronically through the Depository Trust Company or another established clearing corporation performing similar functions. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the fifth Trading Day after the Conversion Date, the applicable Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Notice of Conversion by written notice to the Company.

 

  

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(ii)           Obligation Absolute; Damages. The Company’s obligation to issue and deliver the Conversion Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Company; provided, however, that such delivery shall not operate as a waiver by the Company of any such action that the Company may have against such Holder.  If the Company fails to deliver to a Holder such certificate or certificates pursuant to this Section on the fifth Trading Day after the Share Delivery Date applicable to such conversion, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of this Note being converted, $10 per Trading Day (increasing to $20 per Trading Day on the tenth Trading Day after the Share Deliver Date) for each Trading Day after such fifth Trading Day after the Share Delivery Date until such certificates are delivered.

 

(iii)           Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times, following the filing of the Amendment, reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of this Note, not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions in the Securities Purchase Agreement) be issuable  upon the conversion of all outstanding shares of all Notes. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

3.2           Certain Adjustments.

 

(a)           Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (A) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (defined below); (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (D) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 3.2(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. For purposes of this Note, “Common Stock Equivalents” means any securities of the Corporation or the subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock

 

  

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(b)           Subsequent Sales. If the Company or any subsidiary thereof, as applicable, at any time while this Note is outstanding issues or sells, or in accordance with this Section 3.2(b) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company) for a consideration per share (the “New Issuance Price”) less than a price (the “Applicable Price”) equal to the Conversion Price in effect immediately prior to such issue or sale (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to the New Issuance Price.  For purposes of determining the adjusted Conversion Price under this Section 3.2(b), the following shall be applicable:

 

(i)           Issuance of Options.  If the Company in any manner grants or sells any Options (defined below) and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities (defined below) issuable upon exercise of such Option is less than the Applicable Price, then all of such shares of Common Stock underlying such Option shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share.  For purposes of this Section 3.2(b), “Convertible Securities” means any stock or other securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock, “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities, and for purposes of this Section 3.2(b)(i) the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion or exchange or exercise of any Convertible Security issuable upon exercise of such Option.  No further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities.

 

(ii)           Issuance of Convertible Securities.  If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable Price, then all shares of Common Stock issuable upon conversion of such Convertible Securities shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share.  For the purposes of this Section 3.2(b)(ii), the “lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Security and upon the conversion or exchange or exercise of such Convertible Security.  No further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock upon conversion or exchange or exercise of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price had been or are to be made pursuant to other provisions of this Section 3.2(b), no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

 

  

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(iii)           Change in Option Price or Rate of Conversion.  If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Conversion Price in effect at the time of such change shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold.  For purposes of this Section 3.2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the initial Closing Date are changed in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such change.  No adjustment shall be made if such adjustment would result in an increase of the Conversion Price then in effect.

 

(iv)           Calculation of Consideration Received.  If any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $0.001. If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the gross amount paid by the purchaser of such Common Stock, Options, or Convertible Securities, before any commissions, discounts, fees or expenses. If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business (including goodwill) of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be.  If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for non-cash consideration, the consideration received therefore will be deemed to be the fair value of such non-cash consideration as determined in good faith by the Board of Directors of the Company.

 

(v)           Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3.2(b) in respect of issuances subject to Section 3.2(a) above.  The Company shall notify the Holder in writing, no later than the third (3rd) Trading Day following the issuance of any Common Stock, Options or Convertible Securities subject to this section, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”).  For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3.2(b), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the New Issuance Price regardless of whether the Holder accurately refers to the New Issuance Price in the Notice of Exercise.

 

  

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(c)           Pro Rata Distributions. If the Company, at any time while this Note is outstanding, distributes to all holders of Common Stock (and not to Holders) evidences of its indebtedness or assets (including cash and cash dividends) (other than stock dividends, which shall be subject to Section 3.2(a)) then, in each such case, the Conversion Price shall be adjusted by multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith. In either case the adjustments shall be described in a statement delivered to the Holders describing the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

 

(d)           Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of this Note, the Holders shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holders shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holders new senior secured convertible notes consistent with the foregoing provisions and evidencing the Holders’ right to convert such notes into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3.2(d) and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

  

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(e)           Other Events.  If any event occurs of the type contemplated by the provisions of this Section 3.2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors in good faith will make an appropriate adjustment in the Conversion Price so as to be equitable under the circumstances and otherwise protect the rights of the Holders; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 3.2.

 

(f)           Calculations. All calculations under this Section 3.2 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3.2, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

 

(g)           Notice to the Holders.

 

(i)           Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 3.2, the Company shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(ii)           Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Note (or any part hereof) during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

 

  

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ARTICLE IV

MISCELLANEOUS

 

4.1           Default.  Upon the occurrence of any one or more of the Events of Default specified or referred to in the Purchase Agreement all amounts then remaining unpaid on this Note may be declared to be immediately due and payable and the Holder shall be entitled to exercise such rights as provided in the Purchase Agreement and any remedy provided at law, in equity, by statute or otherwise.

 

4.2           Collection Costs.  Should all or any part of the indebtedness represented by this Note be collected by action at law, or in bankruptcy, insolvency, receivership or other court proceedings, or should this Note be placed in the hands of attorneys for collection after default, the Company hereby promises to pay to the Holder, upon demand by the Holder at any time, in addition to the outstanding principal and all (if any) other amounts payable on or in respect of this Note, all court costs and reasonable attorneys' fees and other collection charges and expenses incurred or sustained by the Holder.

 

4.3           Rights Cumulative.  The rights, powers and remedies given to the Holder under this Note shall be in addition to all rights, powers and remedies given to it by virtue of the Purchase Agreement, any document or instrument executed in connection therewith, or any statute or rule of law.

 

4.4           No Waivers.  Any forbearance, failure or delay by the Holder in exercising any right, power or remedy under this Note, the Purchase Agreement, any documents or instruments executed in connection therewith or otherwise available to the Holder shall not be deemed to be a waiver of such right, power or remedy, nor shall any single or partial exercise of any right, power or remedy preclude the further exercise thereof.

 

4.5           Amendments in Writing.  No modification or waiver of any provision of this Note, the Purchase Agreement or any documents or instruments executed in connection therewith shall be effective unless it shall be in writing and signed by both parties, and any such modification or waiver shall apply only in the specific instance for which given.

 

4.6           Governing Law.  This Note and the rights and obligations of the parties hereto, shall be governed, construed and interpreted according to the laws of the State of New York, wherein it was negotiated and executed. IN ANY LAWSUIT IN CONNECTION WITH THIS NOTE, THE UNDERSIGNED CONSENTS AND AGREES THAT THE STATE AND FEDERAL COURTS WHICH SIT IN THE STATE OF NEW YORK, COUNTY OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION OF ALL CONTROVERSIES AND DISPUTES ARISING HEREUNDER.  THE COMPANY WAIVES THE RIGHT IN ANY LITIGATION ARISING HEREUNDER WITH THE HOLDER (WHETHER OR NOT ARISING OUT OF OR RELATING TO THIS NOTE) TO TRIAL BY JURY.

 

4.7           Successors.  The term “Holder” as used herein shall be deemed to include the Holder and its successors, endorsees and assigns.

 

  

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4.8           Notices.  All notices, demands or other communications given hereunder shall be made in accordance with the requirements of Section 10.6 of the Purchase Agreement.

 

4.9           Certain Waivers.  The Company hereby irrevocably waives notice of acceptance, presentment, notice of nonpayment, protest, notice of protest, suit and all other conditions precedent in connection with the delivery, acceptance, collection and/or enforcement of this Note or any collateral or security therefor.  To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document.

 

4.10           Mutilated, Lost, Stolen or Destroyed Notes.  In case this Note shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver in exchange and substitution for and upon cancellation of the mutilated Note, or in lieu of and substitution for the Note, mutilated, lost, stolen or destroyed, a new Note of like tenor and representing an equivalent right or interest, but only upon receipt of evidence satisfactory to the Company of such loss, theft or destruction and an indemnity, if requested, also satisfactory to it.

 

4.11           Transfer and Assignment.  The Holder may transfer or assign this Note without the consent of the Company.  The Company may not transfer or assign this Note or its obligations hereunder without the consent of the Holder.

 

 

 

  

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IN WITNESS WHEREOF, the Company has caused this Note to be signed by its Chief Executive Officer and to be dated the day and year first above written.

 

 

	
ATTEST [SEAL]

 

 

 

 

	
THE AMACORE GROUP, INC.

 

 

 

By:                                                                

Name:

Title:

 

 

 

  

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ANNEX A

 

CONVERSION NOTICE

TO: THE AMACORE GROUP, INC.

 

The undersigned holder of this Note hereby irrevocably exercises the option to convert $________ principal amount of and $_________________ in accrued but unpaid interest under such Note (which may be less than the stated principal amount thereof) into shares of Class A Common Stock (the “Common Stock”) of The Amacore Group, Inc., in accordance with the terms of such Note, and directs that the shares of Common Stock issuable and deliverable upon such conversion be issued and delivered to the undersigned unless a different name has been indicated below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned holder of such Note, the undersigned will pay all transfer taxes payable with respect thereto.

 

	  	

Name and address of Holder

Signature of Holder

Principal amount of Note

to be converted $_________________________

 

If shares are to be issued otherwise then to the holder:

 

	

Name of Transferee

	  	
Address of Transferee

 

Social Security or Tax ID Number of Transfereeamacore_8k-ex1004.htm

 

Exhibit 10.4

 

FIRST AMENDMENT TO ESCROW AGREEMENT

This FIRST AMENDMENT TO ESCROW AGREEMENT (this “Amendment”), dated as of June 2, 2011, amends that certain Escrow Agreement (the “Escrow Agreement”) dated as of August 16, 2010, between The Amacore Group, Inc., a Delaware corporation (the “Company”), and Vicis Capital Master Fund, a series of the Vicis Capital Master Trust, a trust formed under the laws of the Cayman Islands (the “Purchaser”), and Quarles & Brady LLP, as escrow agent (“Escrow Agent”). Capitalized terms used in this Amendment without definition shall have the respective meanings ascribed to them in the Escrow Agreement.

R E C I T A L S

 

WHEREAS, Purchaser and Company are parties to a Securities Purchase Agreement dated June 2, 2011 (the “June Purchase Agreement”), whereby the Company agrees to sell to the Purchaser up to $2,500,000 in principal amount of its 15% Senior Secured Convertible Notes due June 30, 2012, in exchange for up to $2,500,000 cash (the “Purchase Price”).

 

WHEREAS, the parties wish to have the Escrow Agent hold the Purchase Price in an escrow account and to release funds held in such account in accordance with the terms hereof.

 

NOW, THEREFORE, the Purchaser and Company, intending to be legally bound, hereby agree as follows:

	
  

	
1.

	
Additional Deposit into Escrow.  In accordance with Section 1.4(a) of the June Purchase Agreement, the Purchaser shall deposit into the Escrow Account an aggregate of $2,500,000 cash in accordance with the terms of Section 3 of the Escrow Agreement (which $2,500,000 cash shall be in addition to the $2,500,000 cash previously deposited by the Purchaser in the Escrow Account pursuant to the Purchase Agreement).

	
  

	
2.

	
Extension of Termination Date.  Section 6 of the Escrow Agreement shall be deleted and replaced in its entirety by the following:

6.           Termination and Release of Escrow.  This Escrow Agreement shall terminate upon the earlier of (the “Termination Date”):

 

(a)           the resignation of the Escrow Agent by providing written notice to the parties hereto of the same; or

 

(b)           June 30, 2012.

 

All funds remaining in the Escrow Account upon the Escrow Agent’s resignation shall be delivered to any successor escrow agent mutually agreed to by the Purchaser and Company. All funds held in the Escrow Account after June 30, 2012, shall be distributed to the Purchaser by check or wire transfer to an account designated by the Purchaser.

  

 

  

	
  

	
3.

	
Joint Disbursement Instructions.  Exhibit A to the Escrow Agreement shall be deleted and replaced in its entirety by Exhibit A to this Amendment.

	
  

	
4.

	
Execution.  This Amendment may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile or in other electronic form, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

	
  

	
5.

	
Governing Law.  The validity, construction and effect of this Amendment shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law).

	
  

	
6.

	
Ratification.  Except as expressly amended pursuant to this Amendment, all terms and conditions of the Escrow Agreement are hereby ratified and confirmed in all respects and shall continue in full force and effect.  All references to the Escrow Agreement shall hereafter refer to such Escrow Agreement, as amended hereby.

	
  

	
7.

	
Conflict.  In the event of any conflict between the Escrow Agreement and this Amendment, the terms of this Amendment shall govern.

 

[Signature Page Follows]

  

2

  

IN WITNESS WHEREOF, the parties have caused this First Amendment to Escrow Agreement to be duly executed by their duly authorized rep­resentatives as of the day and year first above written.

 

	 	
COMPANY:

 

THE AMACORE GROUP, INC.

 

/s/ Jay Shafer  

Name:  Jay Shafer

Title:  Chief Executive Officer

 

PURCHASER:

 

VICIS CAPITAL MASTER FUND

By: Vicis Capital LLC

 

/s/ Keith W. Hughes

Name:  Keith W. Hughes

Title:  Chief Financial Officer

                    Vicis Capital, LLC

 

ESCROW AGENT:

 

QUARLES & BRADY LLP

 

By:  /s/ Hoyt R. Stastney                            

         Hoyt R. Stastney, Partner

 

 

 

 

  

3

  

Exhibit A

JOINT DISBURSEMENT INSTRUCTION

Quarles & Brady LLP

411 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Attn: Matthew C. Vogel

Fax: 414-978-8899

Email: matthew.vogel@quarles.com

Date: ______________

RE:  Joint Disbursement Instruction

This Joint Disbursement Instruction is made pursuant to that certain Escrow Agreement (the “Escrow Agreement”), dated August 16, 2010, as amended, by and among Vicis Capital Master Fund, The Amacore Group, Inc. and Quarles & Brady LLP, as escrow agent.  Capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Escrow Agreement.

Please transfer $_________________ from the Escrow Account to the account specified below:

Name:                                                                                                                                         

 

Routing Number:                                                                                                                                         

 

Bank Account Number:                                                                                                                                         

 

Other Instructions (please specify):                                                                                                                               

 

 

	
THE AMACORE GROUP, INC.

 

 

Name:

Title:

	 	
VICIS CAPITAL MASTER FUND

   By: Vicis Capital LLC

 

Name:

Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}]]