NOTE AND SECURITY AMENDMENT AGREEMENT
EXHIBIT
10.2
THIS
NOTE AND SECURITY AMENDMENT AGREEMENT (the
“Agreement”)
is
made and entered into as of the 29th day of December, 2006, by and among
Hydrogen Power, Inc. (f/k/a Equitex, Inc.), a Delaware corporation
(“HPI”),
FastFunds Financial Corporation (f/k/a Seven Ventures, Inc.), a Nevada
corporation (“FastFunds”),
Pandora Select Partners, L.P., a British Virgin Islands limited partnership
(“Pandora”),
and
Whitebox Hedged High Yield Partners, L.P., a British Virgin Islands limited
partnership (“Whitebox”
together with Pandora, the “Secured
Parties”).
R
E C I T A L S
:
WHEREAS,
on
Xxxxx 0, 0000, XXX and Secured Parties entered into a Purchase Agreement (the
“March
2004 Purchase Agreement”)
pursuant to which Pandora and Whitebox loaned $3,000,000 and $2,000,000,
respectively, to HPI documented by a revised set of Convertible Secured
Promissory Notes of the same date issued on June 4, 2004, as amended pursuant
to
an Amendment to Secured Convertible Promissory Notes dated September 15, 2005
(such notes, as so revised and amended, being the “March
2004 HPI Notes”);
WHEREAS,
on
September 15, 2005, HPI and Secured Parties entered into a second Purchase
Agreement (the “September
2005 Purchase Agreement”)
pursuant to which Pandora and Whitebox loaned an additional $900,000 and
$600,000, respectively, to HPI documented by Secured Convertible Promissory
Notes of the same date (the “September
2005 HPI Notes”);
WHEREAS,
on
September 15, 2005, HPI and Secured Parties entered into an Amended Security
Agreement (the “Amended
HPI Security Agreement”)
pursuant to which HPI reconfirmed the pledge of all of its assets to secure,
among other matters, the repayment of the March 2004 HPI Notes and the September
2005 HPI Notes;
WHEREAS,
on
September 15, 2005, HPI and Secured Parties entered into a Stock Pledge
Agreement (the “Stock
Pledge Agreement”)
pursuant to which HPI pledged 7,700,000 shares of FastFunds Common Stock owned
by HPI to Secured Parties as additional collateral to secure, among other
matters, the payment and performance of all obligations under the Amended HPI
Security Agreement;
WHEREAS,
on
Xxxxx 0, 0000, Xxxx Services, Inc., a Minnesota corporation formerly a
subsidiary of HPI and now a subsidiary of FastFunds (“Chex”),
and
Secured Parties entered into a Guaranty Agreement (the “Chex
Guaranty Agreement”)
and a
Chex Guaranty Security Agreement (the “Chex
Guaranty Security Agreement”)
pursuant to which Chex guaranteed HPI’s payment and performance obligations
related to the March 2004 HPI Notes;
WHEREAS,
in
connection with a Redemption, Stock Sale and Release Agreement of this date
between HPI and FastFunds, a copy of which is attached as Exhibit A hereto
(the
“Redemption
Agreement”),
HPI
has requested that Secured Parties enter into a Consent and Release Agreement
of
this date, a copy of which is attached as Exhibit B hereto (the “Consent
and Release Agreement”);
and
WHEREAS,
as a
condition of entering into the Consent and Release Agreement, the Secured
Parties require HPI and FastFunds to enter into this Agreement; NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:
1. Amendment
of the March 2004 HPI Notes.
Each of
the March 2004 HPI Notes is further amended as follows:
(a) Interest
(Section 2 of the March 2004 HPI Notes).
From
and after the date of this Agreement, the 7% per annum interest rate in Section
2 of each of the March 2004 HPI Notes is increased to 10% per annum, and the
10%
per annum interest rate upon an event of default is increased to 13% per
annum.
(b) Payment
(Section 3 of the March 2004 HPI Notes).
(i) Pandora
Note.
On
January 8, 2007, HPI shall pay $86,066.57 as amortized principal and interest.
Commencing on February 8, 2007, and on the 8th day of each of the following
10
months, the amortized principal and interest payable by HPI is $89,344.81 (which
increased amount constitutes the new “Monthly Scheduled Payment” on the Pandora
note).
(ii) Whitebox
Note.
On
January 8, 2007, HPI shall pay $57,367.46 as amortized principal and interest.
Commencing on February 8, 2007, and on the 8th day of each of the following
10
months, the amortized principal and interest payable by HPI is $59,552.56 (which
increased amount constitutes the new “Monthly Scheduled Payment” on the Whitebox
note).
(c) Default
(Section 9 of the March 2004 HPI Notes).
(i) Cash
Balance Reporting.
(A) Section
9(a)(vii) is amended to read as follows:
(vii) The
Maker
fails at any time (whether or not such failure is timely reported to Payee
as
provided by subsection (viii) below) to maintain a cash balance as compared
to
the balance of principal and interest due under the Convertible Secured Notes
in
a ratio equal to at least 1.4 to 1.
(B) A
new
Section 9(a)(viii) is added, to read as follows:
(viii) The
Maker
fails to deliver to Payee, not later than the 1st day of each month (starting
with January 1, 2007) and the 15th of each month (starting with January 15,
2007), a statement signed by the Maker’s Chief Executive Officer certifying
that, as of the date of such statement, the Maker is in compliance with the
cash
balance requirement described in subsection (vii) above; or if, at any time,
Maker is not in compliance with subsection (vii) above, the Maker fails to
deliver to Payee, not later than the first business day after such
non-compliance, a
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statement
signed by the Maker’s Chief Executive Officer certifying such
non-compliance.
(ii) Other
Covenants.
New
Sections 9(a)(ix) and (x) are added, to read as follows:
(ix) The
Maker
shall be in material default of any term, provision or agreement of any of
(A)
the Convertible Secured Notes including, without limitation, Section 6
thereunder, (B) the Purchase Agreement dated September 15, 2005, by and among
Maker, Pandora Select Partners, L.P. (“Pandora”) and Whitebox Hedged High Yield
Partners, L.P. (“WHHY”), (C) the Stock Pledge Agreement dated September 15,
2005, by and among Maker, Pandora and WHHY, (D) the Registration Rights
Agreements dated March 8, 2004 and September 15, 2005 by and among Maker,
Pandora and WHHY, (E) the Guaranty Agreement dated March 8, 2004, by and among
Chex Services, Inc. (“Chex”), Pandora and WHHY, (F) the Chex Guarantee Security
Agreement dated March 8, 2004, by and among Chex, Pandora and WHHY, (G) the
warrants to purchase shares of Common Stock issued or issuable from time to
time
to Pandora and WHHY or (H) the Note and Security Amendment Agreement dated
December 27, 2006, by and among Maker, FastFunds Financial Corporation, Pandora
and WHHY.
(x) Xxxxx
X.
Xxxxx shall be in default of any term, provision or agreement contained in his
Guaranty of this date and such default is not cured within ten (10) days after
written notice from Payee.
(iii) Confession
of Judgment.
New
Section 9(e) is added, to read as follows:
(e) Upon
any
event of default, and in addition to Payee’s other rights, Payee may confess
judgment on Maker’s behalf (as Maker’s attorney-in-fact) for all amounts due
under this Note (including costs of collection) pursuant to the terms of the
Confession of Judgment dated December 27, 2006.
2. Reconfirmations;
Delivery of FastFunds Stock Certificate.
By its
signature below, FastFunds (as successor in interest to Chex) reconfirms its
obligations under the Chex Guaranty Agreement and the Chex Guaranty Security
Agreement. Without limiting the foregoing, FastFunds and HPI reconfirm that,
despite the Redemption Agreement and the Consent and Release Agreement, Secured
Parties maintain a first priority security interest in all of HPI and FastFunds
(and their current and future subsidiaries’) respective assets to secure
repayment of the March 2004 HPI Notes. Upon consummation of the
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FastFunds
stock redemption contemplated by the Redemption Agreement, HPI and FastFunds
will promptly deliver to Secured Parties the original certificate (along with
a
stock power endorsed in blank by HPI) representing the 3,500,000 shares of
FastFunds Common Stock owned by HPI thereafter. The execution and delivery
of
this Agreement also does not affect Secured Parties’ rights as so preserved in
the Consent and Release Agreement.
IN
WITNESS WHEREOF,
the
undersigned have hereunto affixed their signatures.
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Hydrogen
Power, Inc.
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FastFunds
Financial Corporation
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By
/s/ Xxxxx Xxxx
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By
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Its
Chief Executive Officer
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Its
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Pandora
Select Partners, L.P.
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Whitebox
Hedged High Yield Partners, L.P.
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By
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By
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Its
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Its
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