Binding Letter Agreement


    
      

      

    

    
      Exhibit
        10.1 Binding
        Letter Agreement 

       

      


      LETTER
        AGREEMENT

       

      This
        Letter Agreement is entered into on this 5th day of March, 2007, for the
        purpose
        of confirming the general terms of a legally binding agreement by and among
        LitFunding Corp, a Nevada corporation ("LitFunding"), Morton Reed, an individual
        ("Reed") and Rochester Capital Partners, LP, a Nevada Limited Partnership
        ("RCP"), relating to the acquisition by RCP of a controlling equity interest
        in
        LitFunding.

       

      I

      Recitals

       

      A)  LitFunding
        is seeking a merger or financing “Transaction” with an investor in order to
        obtain additional liquidity, pursue its business plan and to maximize
        shareholder value.

       

      B)  Reed,
        the
        current Chief Executive Officer of LitFunding, and its largest shareholder,
        desires to retire from the corporation and to sell his equity interest in
        the
        corporation. Reed currently holds 8,141,563 shares of LitFunding common
        stock.

       

      C)  RCP
        desires to enter into a transaction with LitFunding (the “Transaction”), and
        desires to acquire a common stock interest in LitFunding equal to at least
        55%
        of the outstanding common stock.

       

      D)  By
        and
        through this Letter Agreement, LitFunding, Reed and RCP desire to confirm
        the
        proposed basic terms of the Transaction that will be set forth in a subsequent,
        definitive agreement (“Definitive Agreement”) to be entered into between the
        parties on or before April 13, 2007, unless such date is extended by mutual
        agreement of the parties hereto.

       

      II

      Basic
        Terms

       

      1.  Acquisition
        of LitFunding Stock.
        RCP
        will acquire 40 million shares of common stock from LitFunding’s treasury in
        exchange for the sum of Two Hundred Fifty Thousand and 00/100 ($250,000.00)
        Dollars. Upon execution of this Letter Agreement, LitFunding will issue 21
        million shares to Lehars Handels Ges., M.b.H., located in Graz, Austria
        (“Lehars”), as an assignee of RCP, and the balance of 19 million shares will be
        issued in the name of RCP. The purchase shall be paid by promissory note,
        delivered upon execution hereof, and shall be due upon RCP’s receipt of
        financing from Lehars, but not later than sixty (60) days from the date the
        LitFunding stock is issued. In the event that RCP shall fail to remit payment
        of
        its promissory note when due, LitFunding shall have the sole right to cancel
        all
        share certificates issued and to rescind the Transaction in its entirety.
        In
        such event, RCP covenants with LitFunding that it shall immediately return
        all
        certificates and shall not assert any claim of ownership. Further terms as
        mutually agreed upon by the parties shall be set forth in the Definitive
        Agreement. 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      2.  Additional
        Funding.
        RCP
        shall use its best efforts to obtain funding from third parties in an additional
        amount of up to $180,000 to be used by LitFunding to pay off the balance
        of the
        debt Reed owes in connection with Reed’s Chapter 13 proceeding. In the event
        that RCP is able to fund the amounts needed to satisfy Reed’s Chapter 13 debt,
        RCP shall be entitled to receive Reed’s 5 million shares of LitFunding common
        stock that are currently serving as collateral for his Chapter 13 debt, without
        additional payment. 

       

      3.  Reed
        Stock.
        Reed
        shall sell to RCP, a total of three million (3,000,000) shares for a total
        of
        $30,000, in the form of a note payable to Reed by RCP, upon terms to be set
        forth under the Definitive Agreement.

       

      4.  Reed
        Debt.
        Reed
        shall assign to RCP $350,000 of his claim for accrued salary that is owed
        to
        Reed by LitFunding, inclusive of his right to convert such sums due from
        LitFunding into shares of common stock of LitFunding, for the sum of $35,000
        payable by RCP to Reed. Reed represents that from the Board of Directors,
        he has
        acquired the right to convert the amounts due into shares of common stock
        of
        LitFunding at a reasonable discount from the then-current market value of
        the
        shares at the time of the conversion and RCP’s purchase of this accrued salary
        is contingent upon LitFunding’s actual conversion of said claim into shares of
        common stock of LitFunding at a price which is both reasonable for transactions
        of a similar nature (i.e. debt conversion into restricted common stock by
        a
        corporation that is illiquid) and is mutually acceptable to the parties.
        

       

      5.  Easy
        Money Express Funding.
        The
        parties agree that a minimum of $50,000 of the funds received from RCP in
        the
        Acquisition of LitFunding stock will be deposited directly into a separate
        bank
        account registered in the name of Easy Money Express, Inc., a wholly owned
        subsidiary of LitFunding, to commence its intended plan of business.


       

      6.  Consulting
        Agreements.
        

       

      	a.  	
              Reed
                agrees to stay on as a consultant for a period of no more than one
                year
                for compensation to be determined and set forth in the Definitive
                Agreement.

            


       

      	b.  	
              RCP
                shall receive a consulting agreement to provide management services
                to
                Easy Money Express upon terms to be negotiated prior to and set forth
                in
                the Definitive Agreement. 

            


       

      7.  Major
        Creditor Understandings.
        As part
        of the Transaction (i) Jerry Polis shall have agreed to either convert into
        shares of LitFunding common stock or consent to an extension of the maturity
        date of the terms of the $100,000 debt owed to him by LitFunding, and (ii)
        Andrew Green, or his assignee, shall have similarly agreed to either convert
        or
        extend the terms of the $500,000 debt owed to him by LitFunding, both
        conversions or extensions shall be upon terms that are acceptable to RCP.
        Further, the obligation owed to Winthrop Couchot shall have been renegotiated
        upon terms acceptable to RCP. These transactions must take place prior to,
        or
        simultaneous with the execution of the Definitive Agreement.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      8.  Contingency.
        The
        consummation of the Transaction shall be contingent upon the negotiation
        of the
        Definitive Agreement for the Transaction upon terms which are mutually
        satisfactory to the parties. The terms of the Transaction are to be negotiated
        by the parties and will be subject to closing conditions and contingencies
        to be
        determined in the sole discretion of RCP, including, without limitation,
        satisfactory due diligence review by RCP. 

       

      9.  Board
        Consent.
        LitFunding represents that its Board of Directors, at a meeting duly held
        on
        February 22, 2007, has approved the basic terms of the Transaction contemplated
        by the parties and has authorized Reed, as its CEO, to enter into the Definitive
        Agreement upon terms and conditions which are mutually satisfactory to the
        parties and in the best interests of LitFunding and RCP.

       

      III

      Miscellaneous

       

      10.  No
        Encumbrances.
        All
        shares of LitFunding acquired by RCP hereunder shall be delivered free and
        clear
        of any and all encumbrances of any nature whatsoever (other than restrictions
        on
        resale pursuant to Rule 144 under the Securities Act of 1933) and shall be
        validly issued and nonassessable.

       

      11.  Termination.
        Any
        party may terminate this Letter of Intent by providing the other party with
        written notice of such termination to the other parties if the Definitive
        Agreement for the Transaction between LitFunding and RCP is not executed
        on or
        before 5:00 p.m. (PST) on April 13, 2007. 

       

      12.  No
        Assurances; Binding.
        This
        Letter of Intent is contractual and binding upon all parties signatory hereto.
        LitFunding agrees with RCP that it will not negotiate with any other parties
        pertaining to this contemplated Transaction until this transaction is
        consummated or terminated. 

       

      13.  Counterparts.
        This
        Letter of Intent is executed in counterparts, each of which shall be deemed
        an
        original, but all of which together shall constitute one and the same
        instrument. Delivery of a signed counterpart by facsimile transmission shall
        be
        deemed an original for all purposes.

       

      14.  Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the domestic
        laws of Nevada, without reference to any choice of law provisions.

       

      15.  Expenses;
        Disputes.
        Each of
        the parties will bear its own costs and expenses (including legal fees) incurred
        in connection with this Letter Agreement and the consummation of the Transaction
        contemplated hereby. The prevailing party in any suit or proceeding arising
        under this Letter Agreement shall be entitled to recover its reasonable costs
        and expenses, including a reasonable sum as attorneys’ fees.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      15.  Good
        Faith Deposit.
        RCP
        shall remit the sum of Fifteen Thousand ($15,000.00) Dollars to LitFunding
        as a
        good faith deposit. The sum of Two Thousand Five Hundred and 00/100 ($2,500.00)
        Dollars shall be paid to LitFunding by RCP upon the execution of this Letter
        Agreement, and the balance of Twelve Thousand Five Hundred and 00/100
        ($12,500.00) Dollars shall be paid by RCP directly to LitFunding’s auditor
        within ten days for preparation of the annual report. The good faith deposit
        shall be evidenced by a convertible promissory note that will ensure return
        to
        RCP in the event the parties are unable to mutually agree upon the terms
        of the
        Definitive Agreement. 

       

      [Signature
        Page Follows]

       

       

      IN
        WITNESS WHEREOF,
        the
        Parties hereto have executed this Letter of Intent by their duly authorized
        representatives or agents as of the date first above written.

       

       

      “LITFUNDING”

      LitFunding
        Corp.

       

      
        	 	 	 	 
	By: 	 	 	Date:
	
                
                  

                

                Name:
                  Morton Reed, CEO

              	 	 	
              




      “RCP”

      Rochester
        Capital Partners, LP.

       

      
        
          	 	 	 	 
	By: 	 	 	Date:
	
                  
                    

                  

                  Name:
                    
                    

                  

                   

                	 	 	
                




      

      “REED”

      Morton
        Reed

       

      
        
          	 	 	 	 
	By: 	 	 	Date:
	
                  
                    

                  

                  Morton
                    Reed, an individual

                	 	 	
                





        
          
            
            

          

          
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      EXHIBIT
        A

      PROMISSORY
        NOTE

      


      PROMISSORY
        NOTE

      


      
        	Amount: $250,000.00	
                March
                  5, 2007

              
	 	
                Las
                  Vegas,
                  Nevada

              


      

            

       

      FOR
        VALUE RECEIVED,
        ROCHESTER CAPITAL PARTNERS, L.P. (“Maker”), a Nevada limited partnership with
        offices at 3155 E. Patrick Lane, Suite 1, Las Vegas, Nevada 89120, promises
        to
        pay to the order of LITFUNDING CORP. (“Payee”), a Nevada corporation with
        offices at 6375 S. Pecos Road, Suite 217, Las Vegas, Nevada 89120, the principle
        sum of Two Hundred and Fifty Thousand Dollars ($250,000.00), with no interest,
        to be paid on or before May 5, 2007, in lawful monies of the United States
        of
        America.

      


      Notwithstanding
        the foregoing due date, the Maker promises to prepay this Note prior to the
        due
        date, in whole or in part, upon Maker’s receipt of funds from Lehars Handels
        Ges., M.b.H. Additionally, the Maker may prepay this note at anytime before
        the
        maturity date without penalty. Maker agrees that any monies due under this
        Note
        may be used as an offset against any amounts due Maker by the Payee in
        accordance with the terms of such other liabilities of Payee.

      


      Upon
        any
        default in the payment of principal or interest, or any sum due hereunder,
        the
        whole of the principal sum and all interest accrued hereon shall, at the
        Payee's
        option, without notice or demand, at once become due and payable, together
        with
        interest at the rate of seven percent (7%), per annum, collection charges,
        and a
        reasonable sum as attorney's fees.

      


      This
        Note
        and all other obligations of any maker or endorser hereof, direct or contingent,
        to Payee, shall immediately become due and payable, without notice or demand,
        upon the occurrence, with respect to any maker, endorser or guarantor hereof,
        of
        any of the following events: commencement by or against any of them of any
        proceeding, suit or action for bankruptcy or reorganization, whether voluntary
        or involuntary.

      


      Maker
        hereby waives presentment, demand for payment, notice of dishonor, and any
        and
        all other notices and demands in connection with the delivery, acceptance,
        performance, default or enforcement of this note.

       

      
        	 	 	 
	 	
                ROCHESTER
                  CAPITAL PARTNERS, L.P.

                a
                  Nevada Limited Partnership

              
	 
 	 
 	 
 
	 	By:  	/s/ Gary
                Rasmussen
	 	
                

                Name:
                  Gary Rasmussen Revocable Living Trust,

              
	 	Its:
                General Partner


      

       

       

      
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