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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
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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.
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(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:
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(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 Parties
prior to the date hereof. FastFunds agrees to indemnify and hold
HPI harmless from an
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