IRREVOCABLE FUNDING AGREEMENT
Exhibit
10.9
THIS
IRREVOCABLE FUNDING AGREEMENT (“Agreement”)
is entered into as of December 18, 2006 (“Effective
Date”)
by and between PP60, LLC, a Delaware limited liability company,
(“Lender”)
and LONGFOOT COMMUNICATIONS, CORP., a Delaware corporation
(“Borrower”),
as follows:
Background
and Purpose.
Lender currently has a significant investment in the Borrower and thus has
a
substantial interest in the success of Borrower. Borrower wishes to borrow
from
Lender and Lender agrees to loan to Borrower the amount specified herein on
the
terms and conditions set forth in this Agreement and related exhibits. Borrower
shall use the loan proceeds to fund operations of the Borrower
(“Business”).
Funding
Commitment.
Amount
of Commitment.
Lender,
subject to the terms and conditions of this Agreement, shall loan to Borrower,
from time to time and as requested by Borrower, an amount of up to One Hundred
Fifty Thousand Dollars ($150,000) (“Loan”
or
Loaned
Funds”).
The
funds shall not be utilized by the Borrower in any manner except in furtherance
of the Business. Loaned Funds need not be evidenced by promissory notes but
shall be reflected on the Borrower’s balance sheet as a liability of Borrower to
Lender.
Unconditional
Commitment.
Lender
shall be unconditionally obligated to advance funds upon request from the
Borrower pursuant to this Agreement except only the requirement that
documentation deemed appropriate by Lender, be provided and/or executed by
the
parties to evidence such Loans.
Request
for Loaned Funds.
Requests for Loaned Funds by the Borrower shall be in writing and approved
by
Borrower’s Board of Directors. Such requests shall be delivered to Lender at
least five (5) business days prior to the time such funds are required by
Borrower.
Interests
on Loans.
Borrower shall pay interest of 5.0% per annum on the outstanding balance of
the
Loans. Such interest shall accrue and shall be due and payable as provided
in
Section 2.4 below.
Term;
Repayment of Loaned Funds.
This
Agreement shall expire on December 31, 2007 (“Expiration
Date”)
at
which time all Loaned Funds together with accrued but unpaid interest shall
be
due and payable by Borrower.
The
Borrower may repay all or any portion of the Loaned Funds and/or interest
thereon at any time during the term of this Agreement without
penalty.
Exhibit
10.9
Lender’s
Right of Conversion.
Loans
made pursuant to this Agreement including accrued but unpaid interest shall
be
convertible into shares of Borrower’s common stock at the option of the Lender,
in whole or in part at any time and from time to time, during the term of this
Agreement.
The
Lender shall effect conversions by delivering to the Borrower a completed notice
in the form attached hereto as Exhibit A (a “Conversion
Notice”).
The
date on which a Conversion Notice is delivered is the “Conversion
Date.”
Conversions hereunder shall have the effect of lowering the outstanding
principal amount of the Loans plus all accrued and unpaid interest thereon
in an
amount equal to the applicable conversion. The Lender and the Borrower shall
maintain records showing the principal amount converted and the date of such
conversions. In the event of any dispute or discrepancy, between the records
of
the Lender and the Borrower the parties hereto shall submit such dispute to
an
independent third party mutually chosen and agreed upon by the
parties.
Conversion
Price and Adjustments to Conversion Price.
The
conversion in effect during the term of this Agreement shall be equal to $0.1925
per share (the “Fixed Conversion Price.”) The Fixed Conversion Price may be
adjusted pursuant to the terms set forth below.
If
the
Borrower at any time while this Agreement is in effect, shall (a) pay a stock
dividend or otherwise make a distribution or distributions on shares of its
common stock or any other equity or equity equivalent securities payable in
shares of Common Stock, (b) subdivide outstanding shares of common stock into
a
larger number of shares, (c) combine (including by way of reverse stock split)
outstanding shares of common stock into a smaller number of shares, or (d)
issued by reclassification of shares of the common stock any shares of capital
stock of the Borrower, then the Fixed Conversion Price shall be multiplied
by a
fraction of which the numerator shall be the number of shares of common stock
outstanding before such event and of which the denominator shall be the number
of shares of common stock outstanding after such event. Any adjustment made
pursuant to this section 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.
The
Borrower shall at all times reserve and keep available out of its authorized
common stock the full number of shares of Common Stock issuable upon conversion
of all outstanding amounts under this Agreement and within three (3) business
days following the receipt by the Borrower of Lender’s notice that such minimum
number of underlying shares is not so reserved, the Borrower shall promptly
reserve a sufficient number of shares of common stock to comply with such
requirement.
(d)
The
shares of Common Stock to be issued pursuant to any conversion will be deemed
“restricted securities” as that term is defined in the Securities and Exchange
Commission’s Rule 144 (“Rule 144”) and may not be resold without registration
under the Securities Act of 1933 or, provided certain requirements are met,
the
shares of Common Stock acquired hereunder may be resold pursuant to Rule 144
or
may be resold pursuant to another exemption from the registration requirements.
Due to the above
Exhibit
10.9
limitations,
all share certificates issued pursuant to conversion under this Agreement will
contain a restrictive legend pertaining to the resale restrictions of Rule
144.
The Borrower will have no duty or obligation to register any shares issued
pursuant to conversion under this Agreement
Lenders
Representations and Warranties.
Lender acknowledges that the execution of this Agreement by Borrower is made
in
material reliance by Borrower and its advisors on each and every one of the
following representations and warranties made by Lender. Lender hereby
represents and warrants to Borrower that:
Irrevocable
Commitment.
The
Lender acknowledges its obligation to advance funds to Borrower upon Borrower’s
request without condition or prerequisite except in the event of a default
pursuant to Section 5 below.
Availability
of Funds.
Lender
shall, during the term of this Agreement, maintain adequate financial resources
in order to fund each and every request for funding by Borrower up to the
maximum amount provided for in Section 2.1 of this Agreement. Lender does not
now nor does it foresee any impediment to its ability to fully fund the amount
covered by this Agreement when and if requested by Borrower.
Borrower
Representations and Warranties.
Borrower acknowledges that the execution of this Agreement by Lender is made
in
material reliance by Lender on each and every one of the following
representations and warranties made by Borrower. Borrower hereby represents
and
warrants to Lender that:
Good
Standing; Qualified to do Business.
The
Borrower (a) is duly organized, validly existing, and in good standing under
the
laws of the State of Delaware (b) has the power and authority to own its
properties and assets and to transact the business in which it is presently
engaged, and (c) is duly qualified and authorized to do business and is in
good
standing in every jurisdiction in which the failure to be so qualified could
have a material adverse effect on the Borrower.
Due
Execution.
The
execution, delivery, and performance by the Borrower of this Agreement is within
the powers of the Borrower, does not contravene the organizational documents
of
the Borrower, and does not (a) violate any law or material regulation, or any
order or decree of any court or governmental authority, (b) conflict with or
result in a breach of, or constitute a default under, any material indenture,
mortgage, or deed of trust or any material lease, agreement, or other instrument
binding on the Borrower or any of its properties, or (c) require the consent,
authorization by, or approval of or notice to or filing or registration with
any
governmental authority or other person. This Agreement is the legal, valid,
and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general principles of equity.
Solvency.
The
Borrower is solvent.
No
Judgments, Litigation.
No
judgments are outstanding against the Borrower, nor is there now pending or,
to
the best of the Borrower's knowledge after diligent inquiry, threatened any
litigation, contested claim, or governmental proceeding by or against the
Borrower.
Exhibit
10.9
No
Defaults.
The
Borrower is not in default or has not received a notice of default under any
material contract, lease, or commitment to which it is a party or by which
it is
bound. The Borrower knows of no dispute regarding any contract, lease, or
commitment which could have a material adverse effect on the
Borrower.
Events
of Default.
The occurrence of any of the following events shall constitute an Event of
Default hereunder:
the
Borrower shall fail to pay when due any amount required to be paid by the
Borrower under or in connection with this Agreement or promptly issue shares
of
its common stock in conjunction with any conversions by Lender;
any
representation or warranty made or deemed made by the Borrower under or in
connection with the execution of this Agreement shall prove to have been false
or incorrect in any material respect when made; and
dissolution,
liquidation, winding up, or cessation of the Borrower's business;
Remedies.
If any Event of Default shall have occurred:
The
Lender may, without prejudice to any of its other rights under this Agreement
or
applicable law, declare the Loan to be immediately due and payable without
presentment, representation, demand of payment, or protest, which are hereby
expressly waived.
The
Lender may exercise all of the rights and remedies available to it under law
and
equity and any rights and remedies available under this Agreement solely against
the Borrower.
Miscellaneous
Provisions.
Notices.
Any
notices, requests, demands or other communications required or permitted to
be
given under this Agreement shall be in writing and shall be deemed to have
been
duly given on the date of service if served personally (FedEx and similar
services shall be considered to be personal service) or by telephone facsimile
or other electronic transmission (provided that the sender of a telephone
facsimile or other electronic transmission has received a return receipt signed
by the party so notified, or has other written evidence of receipt), and upon
the second business day after mailing, if mailed to the party to whom notice
is
to be given, by first-class mail, registered or certified, postage prepaid,
return receipt requested, and properly addressed as follows:
To
Lender:
PP60,
LLC
000
Xxxxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Telephone:
(000) 000-0000
To
Borrower: Longfoot
Communications Corp.
0000
Xxxxxx Xxxx., Xxxxx 000
Xxxx
Xxxxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxx, President
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Exhibit
10.9
Any
party
may change its address for purposes of this section by giving the other party
written notice of the new address in the manner set forth above.
Assignments.
The
Borrower shall not have the right to assign this Agreement or any interest
therein. The Lender may not assign its rights or delegate its obligations under
this Agreement.
Amendments,
Waivers, and Consents.
Any
amendment or waiver of any provision of this Agreement and any consent to any
departure by the Borrower from any provision of this Agreement shall be
effective only by a writing signed by the Lender and shall bind and benefit
the
Borrower and the Lender.
Waiver
of Terms.
A
party’s waiver of any breach of any provision contained in this Agreement shall
not constitute a continuing waiver or a waiver of any subsequent breach of
such
provision or any other provision contained in this Agreement.
Survival
of Provisions.
All
representations and warranties of the Borrower contained herein shall survive
the execution and delivery of this Agreement, and shall terminate only upon
the
full and final payment and performance by the Borrower of the Loans contemplated
by this Agreement.
Severability.
In case
any provision in or obligation under this Agreement shall be invalid, illegal,
or unenforceable in any jurisdiction, the validity, legality, and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.
Entire
Agreement.
This
Agreement is the complete and exclusive statement and agreement between the
parties with respect to the subject matter hereof, superseding all proposals
and
prior agreements, oral or written, and all other communications between the
parties with respect to the subject matter hereof.
Governing
Law.
The
validity, interpretation, and enforcement of this Agreement shall be governed
by
and construed in accordance with the laws of the State of California without
giving effect to the conflict of law principles thereof.
Venue;
Service of Process.
Any
legal action or proceeding with respect to this Agreement may be brought in
the
courts of the State of California situated in Los Angeles County, or of the
United States of America for the Central District of California, and, by
execution and delivery of this Agreement, Borrower hereby accepts the
jurisdiction of the aforesaid courts. Borrower hereby irrevocably waives, in
connection with any such action or proceeding, (a) any objection, including,
without limitation, any objection to the laying of venue or based on the grounds
of forum non conveniens, that it may now or hereafter have to the bringing
of
any such action or proceeding in such respective jurisdictions and (b) the
right
to interpose any noncompulsory setoff, counterclaim, or cross-claim. Borrower
irrevocably consents to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to
Exhibit
10.9
Borrower
at the address for it specified above. Nothing herein shall affect the right
of
the Lender to serve process in any other manner permitted by law.
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
and delivered by its proper and duly authorized officer as of the date first
set
forth above.
|
BORROWER:
Delaware
corporation
By:
/s/ Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, its President
By:
/s/ Xxxx
Xxxxx
Xxxx
Xxxxx, its Secretary
LENDER:
PP60,
LLC, a Delaware limited
liability
company
By:
/s/ Sim
Xxxxx
Sim
Xxxxx, its member
|
Exhibit
10.9
EXHIBIT
“A”
NOTICE
OF CONVERSION
(To
be executed by the Lender in order to convert Loaned
Funds)
The
undersigned hereby irrevocably elects to convert $
of the
principal amount and interest thereon advanced pursuant to the Irrevocable
Funding Agreement dated December ___, 2006 in shares of common stock of Longfoot
Communications Corp., according to the conditions stated therein, as of the
Conversion Date written below.
|
Conversion
Date:
|
||
|
Signature
of Lender:
|
||
|
Name:
|
||
|
Address:
|
||
|
Amount
to be converted:
|
$
|
|
|
Amount
of loaned funds unconverted:
|
$
|
|
|
Fixed
Conversion Price per share:
|
$
|
|
|
Number
of shares of Common Stock to be issued:
|
||
|
Please
issue the shares of Common Stock in the following name and to the
following address:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
||
|
Phone
Number:
|
Exhibit
10.9
