EXHIBIT
10.1
REDEMPTION, STOCK SALE AND
RELEASE AGREEMENT
This Redemption, Stock Sale And Release
Agreement (the “ Agreement ”) is
dated as of the 2 nd day of January, 2007, and is by and
between Hydrogen Power, Inc. (f/k/a Equitex, Inc.), a Delaware
corporation ( “HPI ”), and FastFunds
Financial Corporation (f/k/a Seven Ventures, Inc.), a Nevada
corporation (the ” FastFunds
”).
INTRODUCTION
A. On March 8, 2004, HPI (then known as Equitex,
Inc.) entered into that certain Purchase Agreement (the “
Initial Purchase Agreement
”) with Pandora Select Partners, L.P. (“
Pandora ”) and Whitebox Hedged High Yield
Partners, L.P. (“ Whitebox ” together
with Pandora, the “ Secured Parties ”)
by which the Secured Parties loaned HPI the aggregate sum of
$5,000,000, which amount was then loaned by HPI on a secured basis
to Chex Services, Inc. (“ Chex ”) for
use in Chex’s business (the “ Chex
Loan ”). In connection with the Initial Purchase
Agreement, HPI, among other things, entered into a security
agreement with the Secured Parties, pursuant to which it pledged
2,170,000 shares of Chex common stock to the Secured
Parties.
B. On June 7, 2004, HPI and Chex entered into an
Agreement and Plan of Merger (the “ Chex
Merger ”) with FastFunds (then known as Seven
Ventures, Inc.) whereby Chex merged with a wholly-owned subsidiary
of FastFunds, with Chex as the surviving corporation, and FastFunds
became the beneficial owner of all of the capital stock of Chex. As
a condition to the Secured Parties consenting to the Chex Merger
and delivering the 2,170,000 shares of Chex common stock to
FastFunds, FastFunds entered into a security agreement with the
Secured Parties, pursuant to which it granted the Secured Parties a
security interest in all of its assets.
C. On September 15, 2005, HPI and the Secured
Parties entered into a Purchase Agreement (the “
Second Purchase Agreement ”), pursuant to
which the Secured Parties purchased two promissory notes in the
aggregate sum of $1,500,000 and warrants to purchase shares of
common stock of HPI in consideration for a $1,500,000 loan by the
Secured Parties to HPI. In connection with the Second Purchase
Agreement, HPI pledged all of its assets to the Secured Parties,
including 7,700,000 shares of FastFunds common stock (the “
HPI Security Interest ”). Such indebtedness
was guaranteed by Henry Fong pursuant to a guaranty dated September
15, 2005.
D. On January 31, 2006, substantially all of the
assets of Chex were sold to Game Financial Corporation pursuant to
that certain Asset Purchase Agreement by and among FastFunds, Chex
and Game Financial Corporation, dated December 22, 2005 (the
“ Chex Asset Sale ”). The Secured
Parties consented to the Chex Asset Sale and released their
security interests in the applicable Chex assets. The Secured
Parties, however, retained a security interest in the capital stock
of Chex.
E. In connection with the Chex Asset Sale,
FastFunds issued to HPI 4,717,344 shares of FastFunds common stock
in exchange for the conversion of the outstanding note issued by
Chex to HPI in connection with the Chex Loan. As a result,
HPI’s ownership in FastFunds increased from 7,700,000 shares
to 12,417,344 shares.
F. On March 14, 2006, FastFunds loaned $5,000,000
to HPI pursuant to a secured promissory note (the “
FastFunds Note ”; together with any and all
other amounts owing to FastFunds by HPI, including without
limitation any profit participation rights granted by HPI to
FastFunds, the “ FastFunds Debt Payable
”) to satisfy the payment obligation of HPI under the Equitex
Merger (as defined below). The FastFunds Note is due and payable on
March 14, 2007. On the same date thereof, HPI, pursuant to an
Agreement and Plan of Merger and Reorganization by and among HPI
(then known as Equitex,
Inc.), EI
Acquisition Corp. and Hydrogen Power, Inc. (then a privately-held
Delaware corporation) through which Hydrogen Power, Inc. merged
with and into EI Acquisition Corp., with EI Acquisition Corp.
surviving the merger and remaining a wholly-owned subsidiary of HPI
(the “ Equitex Merger ”).
G. HPI desires to transfer to FastFunds, and
FastFunds desires to accept from HPI, shares of common stock of
FastFunds, Denaris Corporation (“ Denaris
”), Key Financial Systems, Inc. (“ Key
Financial ”) and Nova Financial Systems, Inc.
(“ Nova Financial ” together with
Denaris and Key Financial, the “ Other
Subsidiaries ”) held by HPI in consideration of
FastFunds’ forgiveness and cancellation of the FastFunds Debt
Payable and its payment of the Closing Payment, as defined below
(the “ Redemption” ).
H. In order to effectuate the Redemption and the
purchase of capital stock of the Other Subsidiaries by FastFunds,
the parties desire to enter into this Agreement to set forth their
respective rights, obligations, duties and remedies pertaining to
the Redemption and as to other matters relating to their prior
relationship.
AGREEMENT
Now, Therefore, in consideration of the
foregoing facts, the mutual covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1.
Redemption of FastFunds’
Common Stock . At Closing
(as defined herein), FastFunds agrees to redeem an aggregate of
8,917,344 shares of its common stock held by HPI (the “
Redeemed Shares ”). At Closing, HPI agrees
to sell, assign and transfer to FastFunds all of its rights, title
to and interest in the Redeemed Shares free and clear of any and
all liens, pledges, security interests, restrictions of transfer or
encumbrances of any kind or nature.
2.
Transfer of Other
Subsidiaries’ Common Stock . At Closing, HPI agrees to sell, assign and
transfer to FastFunds, and FastFunds agrees to purchase from HPI,
all of HPI’s rights, title to and interest in an aggregate of
(i) 5,000,000 shares of Denaris common stock, (ii) 1,000 shares of
Nova Financial common stock, and (iii) 2,000 shares of Key
Financial common stock held by HPI (collectively, the “
Other Subsidiaries’ Shares ”), free
and clear of any and all liens, pledges, security interests,
restrictions of transfer or encumbrances of any kind or
nature.
3.
Consideration for Redeemed Shares
and Other Subsidiaries’ Shares . In consideration of the Redemption and its
receipt of the Redeemed Shares and the Other Subsidiaries’
Shares as set forth in Sections 1 and 2, FastFunds shall cancel at
Closing the FastFunds Debt Payable and release HPI from any and all
payment and related obligations with respect to the FastFunds Debt
Payable.
4.
Closing . All transactions contemplated by the
Agreement, including the assignment of the Redeemed Shares and the
Other Subsidiaries’ Shares and the Closing Payment, shall
take place on and be effective as of January 2, 2007 or such other
time as agreed by the parties (the “ Closing
”). The time and date on which the Closing occurs shall be
referred to herein as the “ Closing Date
.” At the Closing, FastFunds will pay the Closing Payment to
HPI pursuant Section 3, and HPI will deliver executed assignments
separate from certificate, with respect to the Redeemed Shares and
the Other
Subsidiaries’ Shares, in the forms
attached hereto as Exhibits A, B, C and D ,
respectively. Promptly following the closing, HPI shall use its
best efforts to deliver to FastFunds all of its stock certificates
representing the Redeemed Shares and the Other Subsidiaries’
Shares, duly endorsed in blank for transfer on the books of
FastFunds, Denaris, Key Financial and Nova Financial, and/or an
affidavit of loss with respect to one or more certificates in form
acceptable to FastFunds, in its sole discretion.
5.
Representations and Warranties of
HPI . HPI hereby
represents and warrants to FastFunds, as of the date hereof and as
of the Closing Date, that:
(a) HPI is duly incorporated, validly existing and
in good standing under the laws of the State of
Delaware.
(b) HPI is the record and beneficial owner of the
Redeemed Shares and the Other Subsidiaries’ Shares free and
clear of any and all encumbrances, except for the HPI Security
Interest. Subject to the receipt of the executed Consent and
Release of the Secured Parties (as required by Section 7(c)) and
the assignment of the Redeemed Shares and the Other
Subsidiaries’ Shares pursuant hereto, FastFunds will receive
good and marketable title to the Redeemed Shares and the Other
Subsidiaries’ Shares free and clear of all
encumbrances.
(c) Neither the execution and delivery of this
Agreement nor the transactions contemplated hereby will constitute
a violation or default under any term or provision of any contract,
commitment, indenture or other agreement or restriction of any kind
or character to which HPI is bound.
(d) HPI has obtained the approval of its Board of
Directors to enter into this Agreement and the transactions
contemplated hereby, and has the full legal power and authority to
transfer the Redeemed Shares and the Other Subsidiaries’
Shares without obtaining the consent or approval of any other
person, entity or governmental authority, except for the Secured
Parties.
(e) At Closing, HPI will deliver an executed
assignment separate from certificate, with respect to the Redeemed
Shares and the Other Subsidiaries’ Shares, in the form
attached hereto as Exhibits A, B, C and D
.
(f) HPI has been represented in the preparation and
negotiation of this Agreement and the transactions contemplated
hereby by legal counsel, Maslon Edelman Borman & Brand, LLP,
that is independent and separate from the legal counsel used by
FastFunds for such purposes.
6.
Representations, Warranties and
Covenants of FastFunds .
FastFunds hereby represents, warrants and covenants to HPI, as of
the date hereof and as of the Closing Date, that:
(a) FastFunds is duly incorporated, validly existing
and in good standing under the laws of the State of
Nevada.
(b) Neither the execution and delivery of this
Agreement nor the transactions contemplated hereby will constitute
a violation or default under any term or provision of any contract,
commitment, indenture or other agreement or restriction of any kind
or character to which FastFunds is bound.
(c) FastFunds has full legal power and authority to
redeem the Redeemed Shares and acquire the Other
Subsidiaries’ Shares without obtaining the consent or
approval of any person, entity or governmental authority, except
for the authorization of its board of directors.
(d) FastFunds has obtained the requisite approval
and authorization from its board of directors to enter into this
Agreement and to consummate the Redemption and the other
transactions contemplated hereby.
(e) FastFunds has been represented in the
preparation and negotiation of this Agreement and the transactions
contemplated hereby by legal counsel, David Schaper, that is
independent and separate from the legal counsel used by HPI for
such purposes.
(f) From the date hereof to and including the
Closing Date, FastFunds will not effect any changes in its capital
structure without prior written consent of HPI, such prohibition to
include, without limitation, except as expressly set forth herein,
any action by FastFunds to, directly or indirectly (i) issue any
shares of capital stock or securities exercisable or convertible
into capital stock, (ii) purchase, redeem, retire or otherwise
acquire for value any of its capital stock or other securities now
or hereafter outstanding, return any capital to its stockholders,
or distribute any of its assets to its stockholders or (ii) make
any payment or declare any dividend on any of its capital stock or
other securities.
7.
Conditions to the Obligations of
Each Party . The
respective obligations of HPI and FastFunds to consummate the
transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions as of the Closing Date,
unless waived in writing by all parties:
(a) No temporary restraining order, preliminary or
permanent injunction or other order issued by any court of
competent jurisdiction preventing the consummation of the
transactions contemplated by this Agreement shall be in
effect.
(b) No suit, investigation, action or other
proceeding brought by a governmental entity shall be pending
against HPI or FastFunds which, in the reasonable opinion of
counsel for HPI or FastFunds, would be likely to restrain or
prohibit any such party from consummating the transactions
contemplated hereby or result in damages or other relief being
obtained from such party, except where such suit, investigation,
action or other proceeding is not likely to result in a material
adverse effect to either HPI or FastFunds.
(c) The parties shall have received the written
consent and release of the Secured Parties substantially in the
form attached hereto as Exhibit E .
8.
Conditions to the Obligations of
HPI . The obligations of
HPI to consummate the transactions contemplated by this Agreement
are further subject to the satisfaction of the following conditions
as of the Closing Date:
(a) The representations, warranties and covenants
set forth in Section 6 shall be true and correct in all material
respects as of the Closing Date.
(b) FastFunds shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing.
HPI may waive any condition specified in this
Section 8 if it executes a writing so stating at or prior to
Closing.
9.
Conditions to the Obligations of
FastFunds . The
obligations of FastFunds to consummate the transactions
contemplated by this Agreement are further subject to the
satisfaction of the following conditions as of the Closing
Date:
(a) The representations and warranties set forth in
Section 5 shall be true and correct in all material respects as of
the Closing Date.
(b) HPI shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing.
(c) All actions to be taken by HPI in connection
with consummation of the transactions contemplated hereby and all
certificates and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in
form and substance to FastFunds.
FastFunds may waive any condition specified in
this Section 9 if it executes a writing so stating at or prior to
the closing.
10.
Voting Agreement
. From the date hereof until such
time that HPI and its affiliates beneficially hold less than ten
percent (10%) of the outstanding equity or voting interest in
FastFunds, with respect to any vote of the stockholders of
FastFunds (except a vote directly relating to this Redemption
Agreement, provided that, with respect to such a vote, HPI and its
affiliates will not vote in favor of or otherwise support any
attempt to undermine or avoid the consummation of the transaction
contemplated herein or any of the terms and conditions set forth in
this Agreement), HPI and its affiliates hereby agree to vote the
Redeemed Shares (and any additional shares of capital stock of
FastFunds held by HPI and its affiliates at such time) in the same
manner and proportion as other stockholders of FastFunds vote their
shares. HPI and its affiliates further agree to take any such
further actions as are reasonably requested by FastFunds in order
to effectuate the terms of this provision, including, if necessary,
the execution and delivery of a proxy to vote such shares in the
manner required. Successors and assigns of the Redeemed Shares (and
any additional shares of capital stock of FastFunds held by HPI),
including any assignee by foreclosure or other transfer, are not
intended to be subject to the terms of this provision.
11.
Indemnification
. HPI agrees to indemnify and hold
harmless FastFunds from and against any and all loss, damage or
liability (including, but not limited to, reasonable legal fees and
costs) that FastFunds may incur or suffer by reason of, or which
results, arises out of or is based upon (i) any breach of
HPI’s representations, warranties or covenants contained in
this Agreement, or (ii) the Initial Purchase Agreement, the Second
Purchase Agreement or any other related agreement or debt
instrument entered into by and between HPI and the Secured
Parti