FUNDING AGREEMENT
Firepond Form
8-K Exhibit 99.1
FUNDING AGREEMENT (the "Agreement"), dated as of
August 7, 2008, by and among Firepond, Inc. (formerly known as FP Technology,
Inc.), a Delaware corporation, with headquarters located at 00 Xxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (the "Company"), FP Tech Holdings,
LLC, a Texas limited liability company, located at 000X Xxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx 00000 ("FP
Tech") and __________________________ (the "Investor").
WHEREAS:
A. Pursuant
to that certain Amendment and Exchange Agreement, dated as of April 24, 2008
(the "Amendment and Exchange
Agreement"), by and between the Company and the Investor, and those
certain Amendment and Exchange Agreements, dated as of April 24, 2008 (the
"Other Amendment and Exchange
Agreements", and together with the Amendment and Exchange Agreement, the
"Amendment and Exchange
Agreements"), by and between the Company and each of certain other
investors signatory thereto (the "Other Investors", and together
with the Investor, the "Investors"), among other
things, (i) the Company and each of the Investors holding Senior Secured
Convertible Notes of the Company (each a "CAP Investor" and
collectively, the "CAP
Investors") exchanged such Senior Secured Convertible Notes of the
Company for Amended and Restated Senior Secured Convertible Notes (the "Exchanged CAP Notes"), which
are convertible into shares (the "Exchanged CAP Conversion
Shares") of the Company's common stock, par value $0.001 per share (the
"Common Stock"), (ii)
the Company and each of the CAP Investors exchanged Warrants to Purchase Common
Stock of each such CAP Investor for Amended and Restated Warrants to Purchase
Common Stock, which are exercisable into shares of Common Stock (the "Exchanged CAP Warrants", and
as exercised, the "Exchanged
Cap Warrant Shares"), and (ii) the Company and each of the Investors
holding Senior Secured Subordinated Notes of the Company (each a "Bridge Investor" and
collectively, the "Bridge
Investors") exchanged such Senior Secured Subordinated Notes of the
Company for (x) Amended and Restated Senior Secured Subordinated Notes (the
"Exchanged Bridge
Notes") and (y) shares of Common Stock (the "Exchanged Common
Shares").
B. The
Exchanged CAP Notes are secured by a security interest in all of the assets of
the Company pursuant to that certain Amended and Restated Security Agreement,
dated as of April 24, 2008 (as amended from time to time, the "CAP Security Agreement"), by
and between the Company and The Bank of New York, in its capacity as collateral
agent for the holders of the Exchanged CAP Notes (the "CAP Collateral
Agent").
C. The
Exchanged Bridge Notes are secured by a security interest in substantially all
of the assets of the Company pursuant to that certain Amended and Restated
Security Agreement, dated as of April 24, 2008 (as amended from time to time,
the "Bridge Security
Agreement"), by and among the Company and Radcliffe SPC, Ltd. for and on
behalf of the Class A Segregated Portfolio, in its capacity as collateral agent
for the holders of the Exchanged Bridge Notes (the "Bridge Collateral
Agent").
D. Pursuant
to the Common Stock Purchase Agreement, dated as
of April 24, 2008 (the "Stock
Purchase Agreement"), FP Tech has an option to purchase approximately
357,143 shares of Company Common Stock at a purchase price of no more than $1.40
per share with gross cash proceeds to the Company of at least $500,000 (the
"July
Financing").
E. The
Company has informed the Investor and FP Tech that it requires additional
capital to meet operational goals and objectives.
F. FP
Tech has stated that it is willing to exercise its option pursuant to the July
Financing in return for an option to provide additional funding to the Company;
provided the holders of a majority of the principal amount of the Exchanged CAP
Notes and the holders of a majority of the principal amount of the Exchanged
Bridge Notes execute and deliver to the Company and FP Tech the Agreements (as
defined below) (the date thereof, the "Effective Date").
G. Upon
the consummation of the Additional Funding (as defined below), the Company and
the Investor shall exchange (i) the Exchanged Bridge Notes of the Investor, if
any, for the New Exchanged Bridge Notes (as defined below) and New Exchanged
Common Shares (as defined below), (ii) the Exchanged CAP Notes of the Investor,
if any, for the New Exchanged CAP Notes, (as defined below) and (iii) the
Exchanged CAP Warrants of the Investor, if any, for the New Exchanged CAP
Warrants (as defined below), in each case, in reliance upon the exemption from
registration provided by Section 3(a)(9) of the 1933 Act.
H. Concurrently
herewith certain of the Other Investors are also entering into agreements
identical to this Agreement (the "Other Agreements", and
together with this Agreement, the "Agreements") other than
proportional changes (the "Proportionate Changes") (i) in
the numbers reflecting the different principal amount of such Other Investor's
New Exchanged CAP Notes, (ii) in the numbers reflecting the different number of
shares of Common Stock issuable upon exercise of the New Exchanged CAP Warrants
and (ii) if such Other Investor is a Bridge Investor, in the numbers reflecting
the different principal amount of such Other Investor's New Exchanged Bridge
Notes and New Exchanged Common Shares.
NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises hereinafter set
forth and subject to the terms and conditions set forth in this Agreement, the
Company, FP Tech and the Investor hereby agree as follows:
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1.
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EXERCISE OF OPTION
PURSUANT TO JULY FINANCING AND OPTION FOR ADDITIONAL
FUNDING.
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(a) Exercise of July Financing
Option. No later than five (5) business days after the
Effective Date, FP Tech agrees to purchase, and the Company agrees to sell to FP
Tech, at an exercise price of $1.40 per share, 357,143 shares of Common Stock,
in full satisfaction of the July Financing (as contemplated by the Stock
Purchase Agreement) (the "Initial
Funding").
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(b) Additional
Funding. Effective the business day after the closing of the
July Financing and for a period expiring on June 30, 2009, the Company grants to
FP Tech or its assigns an option to purchase, at an exercise price of $1.40 per
share of Common Stock (such amount, the "AF Purchase Price"), on or
before June 30, 2009, a total of $1.5 million in aggregate amount
of Common Stock (the "Additional
Funding").
(c) Exchange
Election. During the period commencing on the closing of the
Additional Funding and ending on the earlier to occur of (x) June 30, 2009 and
(y) the fifth (5th) Business Day following the closing of the Additional
Funding, the Company may, by written notice to each of the Investors during such
period, elect to consummate the Exchange (as defined below) (the "Exchange
Election").
(d) Exchanged CAP
Notes. Upon the exercise of the Exchange Election, the Company
shall exchange (the "CAP Note
Exchange") the Exchanged CAP Notes of each CAP Investor for senior
secured convertible notes (the "New Exchanged CAP Notes"),
which are convertible into Common Stock (as converted, the "New Exchanged CAP Conversion
Shares") and are identical to the Exchanged CAP Notes except as
follows:
(i)
Maturity. The
Maturity Date (as defined in the New Exchanged CAP Notes) shall be December 31,
2010.
(ii)
Interest. Interest
on the principal balance outstanding from time to time of the New Exchange CAP
Notes accruing at the rate of 12% per annum after December 31, 2009 shall be due
and payable quarterly in arrears on the second business day following the end of
each fiscal quarter end beginning March 31, 2010 through the Maturity
Date.
(iii) Conversion
Price. The Conversion Price of the New Exchanged CAP Notes
shall be $2.00 per share of Common Stock.
(iv) Certain
Definitions. The following term shall have the following
meanings:
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"Excluded Securities" means any
Common Stock issued or issuable: (i) up to an aggregate of 1,706,000 shares
issuable pursuant to any Approved Stock Plan; (ii) pursuant to an underwritten
public offering with a nationally recognized underwriter which generates gross
proceeds to the Company in excess of $10,000,000 (other than an "at-the-market
offering" as defined in Rule 415(a)(4) under the Securities Act of 1933 and
"equity lines"); (iii) in connection with any acquisition by the Company,
whether through an acquisition of stock or a merger of any business, assets or
technologies the primary purpose of which is not to raise equity capital,
(iv) pursuant to the Amendment and Exchange Agreements; (v) pursuant to the
July Financing; (vi) upon exercise of the Warrants; (vii) pursuant to any CWC
Common Stock Distribution; (viii) upon exercise of any Common Stock Equivalents
which are outstanding on the day immediately preceding the Amendment Date;
provided that the terms of such Common Stock Equivalents are not amended or
modified in any manner after the date hereof; (ix) pursuant to the Common Stock
Purchase Agreement by and between the Company and FP Tech Holdings, LLC dated as
of the Amendment Date, not to exceed 1,071,429 shares of Common Stock issued at
a price of $1.40 per share (as adjusted to reflect any stock dividend, stock
split, combination, recapitalization and other similar event with respect to
each such share); (x) upon conversion of the Notes; (xi) upon the conversion of
all principal and interest outstanding as of the Amendment Date under that
certain Equipment Lease Agreement between the Company and FP Tech Holdings, LLC
dated February 11, 2008 at a conversion price of $1.40 per share (as
adjusted to reflect any stock dividend, stock split, combination,
recapitalization and other similar event with respect to each such share); (xii)
upon exchange of the sum of (A) $336,000 in aggregate principal amount and (B)
any accrued and unpaid interest thereon of those certain Second CAP Notes (as
defined in the Amendment and Exchange Agreement) held by FP Tech Holdings, LLC
or its affiliates for Common Stock of the Company at a price of $1.40 per share
(as adjusted to reflect any stock dividend, stock split, combination,
recapitalization and other similar event with respect to the Company's Common
Stock), (xiii) upon conversion of up to $2 million of the Notes and Subordinated
Notes into shares of Common Stock at a conversion price of $2.00 (as adjusted to
reflect any stock dividend, stock split, combination, recapitalization and other
similar event with respect to each such share) on the Closing Date (as defined
in the Amendment and Exchange Agreements); (xiv) in connection with a Subsequent
Placement in which the Net Cash Proceeds are used to either (A) pay off the
Notes and the Subordinated Notes or (B) pay down at least $1,000,000 in the
aggregate of the Notes and/or Subordinated Notes; and (xv) any of the Company's
or any Subsidiaries' issuance of Common Stock pursuant to the Additional
Funding, as defined in that certain Funding Agreement, dated as of August 7,
2008.
(e) Exchanged CAP
Warrants. Upon the exercise of the Exchange Election, the
Company shall exchange (the "CAP Warrant Exchange") the
Exchanged CAP Warrants of each CAP Investor for warrants to purchase Common
Stock (the "New Exchanged CAP
Warrants"), which are exercisable into Common Stock (as exercised, the
"New Exchanged CAP
Warrant Shares")
and are identical to the Exchanged CAP Warrants except that the Exercise Price
of such warrants shall be $2.00 per share of Common Stock.
(f) Exchanged Bridge
Notes. Upon the exercise of the Exchange Election, the Company
shall exchange (the "Bridge
Exchange", and together with the CAP Note Exchange and the CAP Warrant
Exchange, the "Exchange") the Exchanged
Bridge Notes of each Bridge Investor for (x) a number of shares of Common Stock
(the "New Exchanged Common
Shares") determined according to the following formula:
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Original
Principal Amount of the Exchanged Bridge Notes of such Bridge Investor / (AF
Purchase Price X 1.1) X 0.1
and (y)
senior secured notes identical to the Exchanged Bridge Notes (the "New Exchanged Bridge Notes"),
except as follows:
(i)
Maturity. The
Maturity Date (as defined in the New Exchanged Bridge Notes) shall be July 1,
2010.
(ii) Interest. Interest
accruing on the principal balance of the New Exchanged Bridge Notes at the rate
of 15% per annum beginning July 2, 2009 shall be due and payable quarterly in
arrears on the second business day following the end of each fiscal quarter end
beginning September 30, 2009 through the Maturity Date.
(g) Waiver of Existing
Defaults. Upon the closing of the Initial Funding, the
Investor hereby irrevocably waives and fully releases the Company from any
damages it has suffered relating to any breach, default, Event of Default (as
defined in the Exchanged CAP Notes) or Event of Default (as defined in the
Exchanged Bridge Notes), as applicable, arising prior to the date first written
above. The Investor does not, by this instrument, waive any other
provision of the Exchanged CAP Notes or the Exchanged Bridge
Notes. Notwithstanding anything herein to the contrary, nothing
herein shall be deemed to constitute a waiver by the Investor of any Event of
Default (as defined in the Exchanged CAP Notes) or any Event of Default (as
defined in the Exchanged Bridge Notes), as applicable, arising after the date
first written above.
(h) Holding
Period. For the purposes of Rule 144(d), the Company
acknowledges that the holding period of the Exchanged Bridge Notes may be tacked
onto the holding period of the New Exchanged Bridge Notes and the New Exchanged
Common Shares, the holding period of the Exchanged CAP Notes may be tacked onto
the holding period of the New Exchanged CAP Notes and Exchanged CAP Conversion
Shares, the holding period of the Exchanged CAP Warrants may be tacked onto the
holding period of the New Exchanged CAP Warrants and the New Exchanged CAP
Warrants Shares. The Company agrees not to take a position contrary
to this Section 1(h).
(i) Ratifications.
(i)
Existing Transaction
Documents. Each of the Transaction Documents (as defined in
the Amendment and Exchange Agreements) is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects, except as
otherwise amended hereby or in accordance herewith.
(ii) CAP Security
Documents. To the extent that the CAP Security Agreement,
purports to assign or pledge to the CAP Collateral Agent a security interest in
or lien on, any collateral as security for the obligations of the Company from
time to time existing in respect of the Exchanged CAP Notes, such pledge,
assignment and/or grant of the security interest or lien is hereby ratified and
confirmed in all respects, and shall apply with respect to the obligations under
the New Exchanged CAP Notes.
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(iii) Bridge Security
Documents. To the extent that the Bridge Security Agreement,
purports to assign or pledge to the Bridge Collateral Agent a security interest
in or lien on, any collateral as security for the obligations of the Company
from time to time existing in respect of the Exchanged Bridge Notes, such
pledge, assignment and/or grant of the security interest or lien is hereby
ratified and confirmed in all respects, and shall apply with respect to the
obligations under the New Exchanged Bridge Notes.
(j) Amendments. Upon
the consummation of the Exchange, each of the Amendment and Exchange Agreements
are hereby amended as follows (the "Amendments"):
(i)
"Exchanged
Common Shares" is hereby amended to included the New Exchanged Common
Shares.
(ii)
"Exchanged CAP
Notes" is hereby amended and restated as the New Exchanged CAP
Notes.
(iii) "Exchanged
CAP Conversion Shares" is hereby amended and restated as the New Exchanged CAP
Conversion Shares.
(iv) "Exchanged
Bridge Notes" is hereby amended and restated as the New Exchanged Bridge
Notes.
(v)
"Exchanged CAP
Warrants" is hereby amended and restated as the New Exchanged CAP
Warrants.
(vi) "Exchanged
CAP Warrant Shares" is hereby amended and restated as the New Exchanged CAP
Warrant Shares.
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2.
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DELIVERY OF
SECURITIES; OFFICER'S
CERTIFICATE.
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(a) New Exchanged CAP Notes and
New Exchanged CAP Warrants. Upon the consummation of the
Exchange, the Company shall deliver the New Exchanged CAP Notes and New
Exchanged CAP Warrants to each CAP Investor.
(b) New Exchanged Bridge Notes
and New Exchanged Common Shares. Upon the consummation of the
Exchange, the Company shall deliver the New Exchanged Bridge Notes and New
Exchanged Common Shares to each Bridge Investor.
(c) Officer's
Certificate. Upon the consummation of the Exchange, the
Company shall deliver to the Investor an officer's certificate substantially in
the form attached to the Amendment and Exchange Agreement as Exhibit L thereto
executed by the Chief Executive Officer or Chief Financial Officer of the
Company, which includes, without limitation, a certification that the
representations and warranties of the Company in Section 3(b) of the
Amendment and Exchange Agreements (as amended by the Amendments) shall be true
and correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the date of the consummation of the Exchange as though made at that time (except
for representations and warranties that speak as of a specific date, which shall
be true and correct as of such specified date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the date of the consummation of
the Exchange.
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(d) Cancelled
Securities. The Investor hereby covenants to use its
reasonable best efforts to deliver its cancelled Exchanged CAP Notes, if any,
Exchanged CAP Warrants, if any, and Exchanged Bridge Notes, if any, to the
Company or its agents no later than thirty (30) days after the date of the
consummation of the Exchange.
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3.
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REPRESENTATIONS
AND WARRANTIES
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(a) Investor
Representations. The Investor hereby represents and warrants
to the Company and FP Tech:
(i)
Validity;
Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Investor and shall
constitute the legal, valid and binding obligations of the Investor enforceable
against the Investor in accordance with its terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
(ii)
No
Conflicts. The execution, delivery and performance by the
Investor of this Agreement and the consummation by the Investor of the
transactions contemplated hereby will not (x) result in a violation of the
organizational documents of the Investor or (y) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Investor is a party, or (z) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to the Investor, except in the case of clauses (y) and (z)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Investor to perform its obligations
hereunder.
(iii) Accredited
Investor. The Investor is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended (the "Securities Act"), as such rule
is presently in effect, and a "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act.
(iv) Tax Liability. The
Investor has reviewed with its own tax advisors the federal, state, local and
foreign tax consequences of this investment and the transactions contemplated by
this Agreement. The Investor relies solely on such advisors and not on any
statements or representations of the Company, the Company’s counsel, or any of
the Company’s agents. The Investor understands that it (and not the
Company) shall be responsible for its own tax liability that may arise as a
result of this investment or the transactions contemplated by this
Agreement.
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(b) FP Tech
Representations. FP Tech hereby represents and warrants to the
Company and the Investor:
(i)
Validity;
Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of FP Tech and shall constitute the
legal, valid and binding obligations of FP Tech enforceable against FP Tech in
accordance with its terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(ii)
No
Conflicts. The execution, delivery and performance by FP Tech
of this Agreement and the consummation by FP Tech of the transactions
contemplated hereby will not (x) result in a violation of the organizational
documents of the FP Tech or (y) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which FP Tech is a
party, or (z) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
FP Tech, except in the case of clauses (y) and (z) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of the Bridge Investors to perform its obligations
hereunder.
(iii) Accredited
Investor. FP Tech is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act,
and a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act.
(c) Company
Representations. The Company hereby represents and warrants to
FP Tech and the Investor:
(i)
Organization and
Qualification. The Company is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware, and has the requisite corporate power and
authorization to own its properties and to carry on its business as now being
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse Effect. As used in this Agreement,
"Material Adverse
Effect" means any material adverse effect
on the business, properties, assets, operations, results of operations,
condition (financial or otherwise) or prospects of the Company, taken as a
whole, or on the transactions contemplated hereby and the other Transaction
Documents or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform
its obligations under the Transaction Documents.
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(ii) Authorization; Enforcement;
Validity. The Company has the requisite power and authority to
enter into and perform its obligations under this Agreement, and each of the
other agreements that may be entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the "Transaction
Documents"). The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly authorized by the Company's Board
of Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(iii) No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the Certificate of Incorporation of the Company, any capital stock of the
Company or the Bylaws of the Company or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the OTC Bulletin Board (as
applicable, the "Initial
Principal Market")) applicable to the Company or by which any property or
asset of the Company is bound or affected.
(iv) Consents. The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date first written
above, and the Company and is unaware of any facts or circumstances which might
prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence. The
Company is not in violation of the listing requirements of the Initial Principal
Market and has no knowledge of any facts which would reasonably lead to
delisting or suspension of the Common Stock in the foreseeable
future.
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(v) Absence of
Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by either Initial Principal Market, any court, public
board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company, the
Common Stock or any of the Company's officers or directors in their capacities
as such, that is expected to have a Material Adverse Effect.
(vi) Disclosure. To
the Company's knowledge, neither this Agreement, the other Transaction
Documents, nor any other written statements or certificates made or delivered in
connection herewith, when taken as a whole, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.
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4.
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FEES AND
EXPENSES
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Except as otherwise set forth in
this Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement; provided however, FP Tech will reimburse
Radcliffe SPC, Ltd. for and on behalf of the Class A Segregated Portfolio for up
to $10,000 for such fees and expenses. The Company shall pay all
stamp and other non-income taxes and duties levied in connection with the
issuance of the Securities (as defined in the Amendment and Exchange Agreement
(as amended by the Amendments)).
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5.
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MISCELLANEOUS.
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(a) Disclosure of Transactions
and Other Material Information. On or before 8:30 a.m., New
York City time, on the third Business Day following the date of this Agreement
(the "Initial 8-K Filing
Time"), the Company shall file a Current Report on Form 8-K describing
the terms of the transactions contemplated hereby in the form required by the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), and attaching the
material transaction documents that have not previously been filed with the SEC
by the Company (including, without limitation, the form of this Agreement) as
exhibits to such filing (including all attachments, the "Initial 8-K
Filing"). From and after the filing of the Initial 8-K Filing
with the SEC, the Investor shall not be in possession of any material, nonpublic
information received from the Company, any of its subsidiaries or any of its
respective officers, directors, employees or agents that is not disclosed in the
Initial 8-K Filing. On or before 8:30 a.m., New York City time, on
the third Business Day following the consummation of the Exchange (the "Exchange 8-K Filing Time"),
the Company shall file a Current Report on Form 8-K describing the terms of the
transactions contemplated hereby in the form required by the Securities and
Exchange Act of 1934, as amended (the "1934 Act"), and attaching the
material transaction documents that have not previously been filed with the SEC
by the Company (including, without limitation, the New Exchanged CAP Notes, the
New Exchanged CAP Warrants and the New Exchanged Bridge Notes) as exhibits to
such filing (including all attachments, the "Exchange 8-K Filing", and
together with the Initial 8-K Filing, the "8-K Filings"). From
and after the filing of the Exchange 8-K Filing with the SEC, the Investor shall
not be in possession of any material, nonpublic information received from the
Company, any of its subsidiaries or any of its respective officers, directors,
employees or agents that is not disclosed in the Exchange 8-K
Filing. The Company shall not, and shall cause each of its
subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide the Investors with any material, nonpublic
information regarding the Company or any of its subsidiaries from and after the
filing of the 8-K Filing with the SEC without the express written consent of the
Investors. In the event of a breach of the foregoing covenant by the
Company, any of its subsidiaries, or any of its or their respective officers,
directors, employees and agents, in addition to any other remedy provided herein
or in the Transaction Documents, the Investors shall have the right to make a
public disclosure, in the form of a press release, public advertisement or
otherwise, of such material, nonpublic information without the prior approval by
the Company, its subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Investors shall not have any
liability to the Company, its subsidiaries, or any of its or their respective
officers, directors, employees, stockholders or agents for any such
disclosure. Subject to the foregoing, neither the Company nor the
Investors shall issue any press releases or any other public statements in
respect of the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of the Investors, to make
any press release or other public disclosure in respect of such transactions (i)
in substantial conformity with the 8-K Filings and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in the
case of clause (i) the Investor shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its
release). Without the prior written consent of the Investor and other
than as required by applicable law, including the 1934 Act and the 8-K Filings,
neither the Company, its subsidiaries or anyone acting on their behalf shall
disclose the name of the Investor in any filing, amendment or
otherwise.
(b) Governing Law; Jurisdiction;
Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by
law. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
-11-
(c) Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
(d) Headings. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(e) Severability. If any
provision of this Agreement is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).
(f) No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto, the CAP Collateral Agent, the Bridge Collateral Agent and
their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.
(g) Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
-12-
(h) Indemnification. In
consideration of the Investor's execution and delivery of this Agreement and in
addition to all of the Company's other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless the
Investor and each other holder of the Securities and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees") from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (x)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (y) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(z) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of any securities of the Company,
or (iii) the status of the Investor or holder of the Securities (as defined in
the Amendment and Exchange Agreements) or Securities (as defined in the
Amendment and Exchange Agreements (as amended by the Amendments)) as an investor
in the Company. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
(i) No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
(j) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
(k) Notices. Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications
shall be:
If to the
Company:
00 Xxxxx
Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Telephone: (000)
000 0000
Facsimile: (000)
000 0000
Attention: General
Counsel
-13-
with a
copy (for informational purposes only) to:
Vorys,
Xxxxx, Xxxxxxx and Xxxxx LLP
2100 One
Cleveland Center
0000 Xxxx
Xxxxx Xxxxxx
Xxxxxxxxx,
XX 00000-0000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxx
X. Xxxxxxxx, Esq.
If to FP
Tech:
FP Tech
Holdings, LLC
000X
Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: President
If to an
Investor, to its address and facsimile number set forth on the Schedule of
Investors attached hereto, with copies to the Investor's representatives as set
forth on the Schedule of Investors.
with a
copy (for informational purposes only) to:
Xxxxxxx
Xxxx & Xxxxx LLP
000 Xxxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxx, Esq.
or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(l) Remedies. The
Investor shall have all rights and remedies set forth in this Agreement and all
of the rights which the Investor has under any law. Any Person having
any rights under any provision of this Agreement shall be entitled to enforce
such rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company
recognizes that in the event that it fails to perform, observe, or discharge any
or all of its obligations under this Agreement, any remedy at law may prove to
be inadequate relief to the Investor. The Company therefore agrees
that the Investor shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
-14-
(m) Independent Nature of
Investor's Obligations and Rights. The obligations of the
Investor under this Agreement are several and not joint with the obligations of
any Other Investor, and the Investor shall not be responsible in any way for the
performance of the obligations of any Other Investor. Nothing
contained herein, and no action taken by the Investor pursuant hereto, shall be
deemed to constitute the Investor and the Other Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this
Agreement and the Company acknowledges that the Investors are not acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. The Company and the Investor confirms
that the Investor has independently participated in the negotiation of the
transactions contemplated hereby with the advice of its own counsel and
advisors. The Investor shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any Other Investor to be
joined as an additional party in any proceeding for such purpose.
(n) Most Favored
Nation. The Company hereby represents and warrants as of the
date hereof and covenants and agrees from and after the date hereof that none of
the terms offered to any person with respect to any amendment, settlement or
waiver (each a "Settlement
Document") relating to the terms, conditions and transactions
contemplated hereby, is or will be more favorable to such person than those of
the Investor and this Agreement shall be, without any further action by the
Investor or the Company, deemed amended and modified in an economically and
legally equivalent manner such that the Investor shall receive the benefit of
the more favorable terms contained in such Settlement
Document. Notwithstanding the foregoing, the Company agrees, at its
expense, to take such other actions (such as entering into amendments to the
Transaction Documents) as the Investor may reasonably request to further
effectuate the foregoing.
[Signature
Page Follows]
-15-
IN WITNESS WHEREOF, the
undersigned have caused their respective signature page to this Funding
Agreement to be duly executed as of the date first written above.
|
COMPANY:
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
[Signature
Page to Funding Agreement]
IN WITNESS WHEREOF, the
undersigned have caused their respective signature page to this Funding
Agreement to be duly executed as of the date first written above.
|
FP
TECH:
|
|||
|
FP
Tech Holdings, LLC
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
[Signature
Page to Funding Agreement]
IN WITNESS WHEREOF, the
undersigned have caused their respective signature page to this Funding
Agreement to be duly executed as of the date first written above.
|
INVESTOR:
|
|||
|
By:
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
[Signature
Page to Funding Agreement]
SCHEDULE
OF INVESTORS
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
|||||
|
Purchaser
|
Address
and Facsimile Number
|
Aggregate
Principal Amount of Exchanged CAP Note
|
Aggregate
Number of Exchanged CAP Warrant Shares
|
Aggregate
Principal Amount of Exchanged Bridge Note
|
Legal
Representative’s Address and Facsimile Number
|
|||||
|
Radcliffe
SPC, Ltd. for and on behalf of the
|
c/o
RG Capital Management, L.P.
|
$1,204,000
|
212,500
|
$2,091,500
|
Xxxxxxx
Xxxx & Xxxxx LLP
|
|||||
|
Class
A Segregated Portfolio
|
0
Xxxx Xxxxx-Xxxx, Xxxxx 000
|
000
Xxxxx Xxxxxx
|
||||||||
|
Xxxx
Xxxxxx, XX 00000
|
Xxx
Xxxx, Xxx Xxxx 00000
|
|||||||||
|
Attention:
Xxxxxx X. Xxxxxxxxxx
|
Attention: Xxxxxxx
Xxxxx, Esq.
|
|||||||||
|
Facsimile:
(000) 000-0000
|
Facsimile:
(000) 000-0000
|
|||||||||
|
Telephone:
(000) 000-0000
|
Telephone:
(000) 000-0000
|
|||||||||
|
Residence:
Cayman Islands
|
||||||||||
|
Wolverine
Convertible Arbitrage Fund Trading Limited
|
Wolverine
Asset Management
|
$112,000
|
24,286
|
$784,312
|
||||||
|
000
X Xxxxxxx #000
|
||||||||||
|
Xxxxxxx,
XX 00000
|
||||||||||
|
Attention:
Xxxx Xxxxxx
|
||||||||||
|
Facsimile:
|
||||||||||
|
Telephone:
(000) 000-0000
|
||||||||||
|
Residence:
Illinois
|
||||||||||
|
Context
Advantage Master Fund L.P.
|
c/o
Context Capital Management, LLC
|
$448,000
|
97,143
|
N/A
|
||||||
|
0000
Xxxxxxxxx Xxxxx, Xxxxx 000
|
||||||||||
|
Xxx
Xxxxx, XX 00000
|
||||||||||
|
Fax:
000 000 0000
|
||||||||||
|
XX
Xxxxxx Securities, Inc.
|
000
Xxxx Xxxxxx 0xx Xxxxx
|
$1,512,000
|
327,857
|
326,797
|
||||||
|
Xxx
Xxxx, XX 00000
|
||||||||||
|
Attention:
Xxxx Xxxxxx
|
||||||||||
|
Facsimile:
|
||||||||||
|
Telephone:
(000) 000-0000
|
||||||||||
|
JMG
Capital Partners L.P.
|
11601
Wilshire Blvd,
|
$378,000
|
81,964
|
$261,478
|
||||||
|
Xxx
0000
|
||||||||||
|
Xxx
Xxxxxxx, XX 00000
|
||||||||||
|
Attention:
Xxxxxx Xxxxxx
|
||||||||||
|
Facsimile:
(000) 000-0000
|
||||||||||
|
Telephone:
(000) 000-0000
|
||||||||||
|
Residence: California
|
|
JMG
Triton Offshore Fund, Ltd.
|
00000
Xxxxxxxx Xxxx, Xxx 0000
|
$378,000
|
81,964
|
$261,478
|
||||||
|
Xxx
Xxxxxxx, XX 00000
|
||||||||||
|
Attention:
Xxxxxx Xxxxxx
|
||||||||||
|
Facsimile:
(000) 000-0000
|
||||||||||
|
Telephone:
(000) 000-0000
|
||||||||||
|
Residence:
BVI
|
||||||||||
|
Cheyne
Fund LP
|
Sornoway
House 13
|
$492,800
|
106,857
|
N/A
|
||||||
|
Xxxxxxxxx
Xxx
|
||||||||||
|
Xxxxxx,
XX0 0Xx
|
||||||||||
|
Xxxxxx
Xxxxxxx
|
||||||||||
|
Attention :
Xxxxx Xxxxxxxxx
|
||||||||||
|
Facsimile :
|
||||||||||
|
Telephone :
x00-000-000-0000
|
||||||||||
|
Cheyne
Leverage Fund
|
Sornoway
House 13
|
$403,200
|
87,429
|
N/A
|
||||||
|
Xxxxxxxxx
Xxx
|
||||||||||
|
Xxxxxx,
XX0 0Xx
|
||||||||||
|
Xxxxxx
Xxxxxxx
|
||||||||||
|
Attention :
Xxxxx Xxxxxxxxx
|
||||||||||
|
Facsimile :
|
||||||||||
|
Telephone :
x00-000-000-0000
|
||||||||||
|
Cranshire
Capital LP
|
0000
Xxxxxx Xxxx, Xxxxx 000
|
$56,000
|
12,143
|
X/X
|
||||||
|
Xxxxxxxxxx,
XX 00000
|
||||||||||
|
Attention:
Xxxxx Xxxxx
|
||||||||||
|
Facsimile:
|
||||||||||
|
Telephone:
(000) 000-0000
|
||||||||||
|
AGGREGATE
|
$5,264,000
|
1,285,714
|
$3,921,643
|
