FOLDERA, INC. Santa Ana, California 92705
EXHIBIT
10.1
0000
Xxxxxxx Xxxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
July
14,
2008
Vision
Opportunity Master Fund, Ltd.
00
Xxxx
00xx
Xxxxxx,
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
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Re:
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Debenture
Prepayment and Conversion Letter
Agreement
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Ladies
and Gentlemen:
Reference
is made to the Securities Purchase Agreement, dated as of December 7, 2007
(the
“Securities
Purchase Agreement”),
between Foldera, Inc. (the “Company”)
and
Vision Opportunity Master Fund, Ltd. (“Vision”).
All
capitalized terms used in this letter agreement which are not defined herein
shall have the same meaning as in the Securities Purchase
Agreement.
The
Company, having pursued multiple alternatives in an attempt to turnaround the
Company’s existing workflow software business, is engaged in certain ongoing
negotiations with Vision with respect to financing the continuation of the
Company’s operations. As part of such negotiations, the Company is contemplating
the possible (i) sale of its capital stock (or similar convertible securities)
or assets to a third party (in one or a series of transactions) or (ii) the
acquisition by the Company (by way of a merger, or otherwise) of another ongoing
business (in one or a series of transactions) with the result of a possible
change of control and/or business direction of the Company (any such event,
a
“Contemplated
Transaction”).
Notwithstanding
the terms of any Transaction Document to the contrary, and subject to compliance
by the parties with the provisions of this letter agreement, the parties hereby
agree as follows:
1. Prepayment
of Debenture.
On the
date of execution of this letter agreement by the parties (the “Effective
Date”),
the
Company shall prepay $400,000 in principal amount of the existing Debenture,
minus $20,000 in accrued and paid interest thereon. Such principal prepayment,
minus interest, therefore totaling $380,000, shall be made by wire transfer
of
immediately available funds to an account designated by Vision.
2. Conversion
of Remaining Debenture.
Vision
will convert the entire remaining outstanding principal amount of the Debenture,
$620,000, plus accrued but unpaid interest, into shares of Common Stock of
the
Company (“Company
Common Stock”)
(in
which event the redemption procedures set forth in Sections 6(a) and 6(b) of
the
Debenture shall apply) at a target conversion price of $0.35 per share. The
Company agrees to immediately issue in the name of Vision 1,771,429 shares
of
Company Common Stock, with all appropriate transfer taxes paid, if any, at
the
expense of the Company. Upon prepayment of a portion of the Debenture pursuant
to the terms of Section 1 above and conversion of the remaining portion of
the
Debenture pursuant to the terms of this Section 2, Vision shall xxxx the
original Debenture as “cancelled” and “paid in full,” and shall return same to
the Company.
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3. Warrant
Conversion.
The
Warrants currently held by Vision entitling Vision to acquire 8,258,378 shares
of Common Stock at a target price of $0.35 per share, are hereby exchanged
for
825,838 shares of Company Common Stock. The Company agrees to immediately issue
in the name of Vision such 825,838 shares of Company Common Stock, with all
appropriate transfer taxes paid, if any, at the expense of the Company. Vision
acknowledges that the Company, after fulfilling its obligations contemplated
by
this Agreement, has no further obligation or commitment to issue shares of
Company Common Stock to Vision.
4. Waiver
of Warrant Anti-Dilution Provisions.
Vision
hereby waives any and all anti-dilution provisions in the Warrants (including
all adjustment provisions) with respect to Company Common Stock issued. The
Company hereby represents that all Warrants have been exercised or their
anti-dilution provisions have been waived and that there are no rights with
respect to anti-dilution under any convertible securities.
5. Termination
of Security Agreement.
The
parties hereby agree that the Security Agreement, dated December 7, 2007,
entered into with the Company is hereby terminated, rendered null, void and
is
of no further force and effect.
6. Termination
of Lock-Up Agreements.
The
parties hereby agree that each of the Lock-Up Agreements entered into with
the
executive officers and directors of the Company in December 2007 is hereby
terminated and is of no further force and effect.
7. SECP
Fees.
On the
Effective Date, Vision shall assume, and agree to pay in full, fees and charges
in the amount of $24,000 owed by the Company to SECP, an investment banking
firm
retained by the Company in connection with one of the Contemplated
Transactions.
8. Support
for Various Actions in connection with Contemplated Transaction
(a) Vision
agrees to support, and vote its Company Common Stock in favor of, a proposal
to
amend the Company’s articles of incorporation to effect a reverse stock split of
the outstanding shares of Company Common Stock at a ratio of up to 1-for-10
shares (with the exact ratio to be determined by the Company’s board of
directors).
(b) Vision
agrees to support, and vote its Company Common Stock in favor of, a proposal
to
amend the Company’s 2005 Stock Option Plan increasing the number of shares of
Company Common Stock reserved for issuance thereunder to a number equal to
up to
80% of the outstanding shares of Company Common Stock (with the exact number
of
shares to be determined by the Company’s board of directors).
(c) Vision
agrees to support, and vote its Company Common Stock in favor of, a proposal
to
amend the Company’s articles of incorporation to change the corporate name of
the Company to one that is consistent with the Company’s future business in the
event of a Contemplated Transaction (with the exact name to be determined by
the
Company’s board of directors).
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9. Lock-up
Agreements.
For six
(6) months commencing on the Effective Date, Vision (together with all of the
Company’s executive officers, directors and other affiliates) will not, directly
or indirectly, publicly offer, sell, contract to sell, hypothecate, pledge
or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or an effective economic disposition due to cash settlement or
otherwise, but other than to an affiliate of Vision) (each, a “Disposition”)
any
shares of Company Common Stock beneficially owned on the Effective Date
(including shares of Company Common Stock acquired pursuant to this Agreement),
without the prior written consent of the Company. Following the initial six
(6)
month period, for each 30-day period, Vision may make a Disposition of a number
of shares of Company Common Stock representing the number of shares of Company
Common Stock that, in each case, is equal to (or less than) the Disposition
Limitation. For purposes hereof, the “Disposition
Limitation”
means
1/12 of the shares of Company Common Stock then owned by Vision (or, as the
case
may be, its executive officers, directors or other affiliates). The Disposition
Limitation shall expire 18 months after the Effective Date. Beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act. In order to enforce this covenant, the Company shall impose irrevocable
stop-transfer instructions preventing its transfer agent from effecting any
actions in violation of this Section 9.
10. Representations.
Each of
the parties hereto represents severally and as to itself only that this letter
agreement has been duly authorized, executed and delivered by it and, assuming
the due authorization, execution and delivery of this letter agreement by the
other party hereto, constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except to the extent that
enforceability (x) may be limited by bankruptcy, insolvency or other similar
laws affecting or relating to the enforcement of creditors’ rights generally and
(y) is subject to general principles of equity (whether such enforceability
is
considered in a proceeding in equity or at law).
11. General
Provisions.
This
letter agreement (a) constitutes the entire understanding of the parties hereto
with respect to its subject matter, (b) supersedes all prior agreements and
understandings between the parties with respect to its subject matter, (c)
may
be executed in any number of counterparts, each of which shall be deemed to
be
an original, but all of which together shall constitute one instrument, (d)
shall be governed by and construed in accordance with the laws of the State
of
New York, and (e) shall inure to the benefit of and shall be binding upon the
parties hereto and their respective successors and assigns.
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If
the
foregoing correctly sets forth our agreement, please acknowledge your acceptance
of the terms of this letter agreement by signing and returning a copy of this
letter agreement to the undersigned.
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Very
truly yours,
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By:
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/s/Xxxx
Dunerley
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Xxxx
Xxxxxxxxx
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President
and Chief Executive Officer
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Agreed
to
and Accepted by:
VISION
OPPORTUNITY MASTER FUND, LTD.
By:
/s/Xxxx
Xxxxxxxx
Xxxx Xxxxxxxx
Portfolio Manager
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