EXHIBIT
10.5
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AGREEMENT
This amendment (the
“Amendment”) to that certain Securities Purchase
Agreement by and between Vertical Branding, Inc. f/k/a MFC
Development Corp. (the “Company”) and Gottbetter
Capital Master Ltd. (In Voluntary Liquidation) (as successor in
interest to Gottbetter Capital Finance, LLC) (the
“Buyer”) , dated as of July 31, 2006 (the “July
2006 SPA”) is entered into by and between the Company and the
Buyer listed below this 30 th day of April, 2009 (the
“Effective Date”). This Amendment is made with
reference to the following facts:
WHEREAS, the Company and
the Buyer of those certain senior secured convertible notes issued
pursuant to the July 2006 SPA (the “Notes”) have
entered into an agreement providing for, among things,
Buyer’s consent (the “Consent Agreement”) to the
Company’s entry into that certain Master Agreement by and
between, among others, the Company and P2F Holdings (the “P2F
Agreement”); and
WHEREAS, in connection
with Buyer’s consent to the transactions contemplated by the
P2F Agreement and with related agreements and undertakings, the
Buyer and the Company have agreed to certain amendments to the July
2006 SPA which they now wish to memorialize by this
Amendment.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants,
representations, warranties and agreements contained herein, and
for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1.
Defined
Terms. Capitalized terms used and not
defined herein shall have the meanings given to them in the July
2006 SPA.
2.
Representations and
Warranties of the Company . Section 3(b) of the July
2006 SPA shall be deleted in its entirety and in its place the
following shall be inserted:
“Authorization; Enforcement;
Validity. The Company has the requisite corporate power and
authority to enter into and perform its obligations under this
Agreement, the Notes, the Warrants, the Security Documents, and
each of the other agreements entered into by the parties hereto in
connection with the transactions contemplated by this Agreement
(collectively, the “Transaction Documents”) and to
issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the
issuance of the Notes and Warrants, the reservation for issuance
and the issuance of Warrant Shares issuable upon conversion of the
Warrants, and the granting of a security interest in the Collateral
(as defined in the Security Documents) have been duly authorized by
the Company’s Board of Directors and (other than (i) the
filing of appropriate UCC financing statements wi
