Document:

ex10_1.htm

    
      

    

    Exhibit
10.1

       

      SUBSCRIPTION
AGREEMENT

       

      This
SUBSCRIPTION AGREEMENT (this “Agreement”), dated as
of January 9, 2009 (the “Closing Date”), is
made by and between Vantage Drilling Company, a Cayman Islands exempted company
(the “Company”), and F3
Capital, a Cayman Islands exempted company, (the “Purchaser”).

       

      W I T N E S S E T
H

       

      WHEREAS,
by that Contract for the Construction and Sale of one Deepwater Drillship (Hull
#3601, hereinafter referred to as the “Platinum Explorer”)
by and between Mandarin Drilling Corporation (“Mandarin”), as Buyer,
and Daewoo Shipbuilding and Marine Engineering Company Ltd. dated September 13,
2007, Mandarin owns the Platinum Explorer.

       

      WHEREAS,
by that certain Sale Share and Purchase Agreement (the “Purchase Agreement”)
dated November 13, 2008 by and between Purchaser and Vantage Deepwater Company,
a Cayman Islands exempted company and a wholly owned subsidiary of the Company
(“Deepwater”),
Deepwater agreed to purchase 45% of the outstanding capital shares of Mandarin
for aggregate consideration of USD$189,750,000.

       

      WHEREAS,
by that certain Shareholder Agreement to be entered into by and between
Purchaser and Deepwater (the “Shareholder
Agreement”) as a condition to the closing of the Purchase Agreement,
Mandarin has the obligation to post a bond in the amount of approximately
USD$17,300,000 as a performance guaranty in connection with that certain Oil and
Natural Gas Company of India Tender #MR/DS/MM/CT/DW – 7500/26(A)/2008/P46JC08001
(the “Performance
Bond”).

       

      WHEREAS,
the Shareholder Agreement requires that Purchaser fund 55% of the USD$17,300,000
cash collateral required for the Performance Bond and that Deepwater fund 45% of
the USD$17,300,000 cash collateral required for the Performance
Bond.

       

      WHEREAS,
in order for Deepwater to raise the proceeds necessary to fund its 45% portion
of the USD$17,300,000 cash collateral requirement for the Performance Bond,
Purchaser and the Company desire to consummate a private placement of ordinary
shares of the Company.

       

      WHEREAS,
upon the terms and subject to the conditions hereinafter set forth, the Company
desires to issue and sell to Purchaser the Company’s ordinary shares, par value
USD$0.001 per share (the “Purchased Shares”),
and Purchaser desires to subscribe for and purchase the Purchased Shares from
the Company; and

       

      NOW,
THEREFORE, for and in consideration of the foregoing and the respective
representations, warranties, covenants, and agreements hereinafter set forth,
the parties hereto hereby agree as follows:

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      ARTICLE
I

      PURCHASE
AND SALE OF PURCHASED SHARES

       

      1.1           Purchase and Sale of Purchased
Shares.  Subject
to the terms and conditions hereof, effective as of the Closing Date, Purchaser
hereby irrevocably subscribes for and purchases from the Company, and the
Company hereby issues and sells to Purchaser, the Purchased Shares.

       

      1.2           Amount and Form of
Consideration.  The
total consideration to be paid by Purchaser to the Company in consideration of
the issue and sale of the Purchased Shares shall be Eight Million dollars
(USD$8,000,000 (the “Purchase
Price”).  The number of Purchased Shares to be issued by the
Company to the Purchaser will be determined by dividing (a) the Purchase Price
by (b) the greater of (i) USD$0.80 or (ii) the average of the closing price for
the Company’s ordinary shares for the five (5) trading days preceding the
Closing Date.  Purchaser shall pay for the Purchased Shares in cash by
wire transfer of immediately available funds on the Closing Date.

       

      1.3           The
Closing Date shall be January 9, 2009.

       

      ARTICLE
II

      REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

       

      Purchaser
hereby represents and warrants to, and covenants and agrees with, the Company as
follows:

       

      2.1           Authorization;
Enforceability.

       

      (a)           The
execution, delivery and performance by Purchaser of this Agreement are within
Purchaser’s lawful powers and have been duly authorized by the board of
directors, board of managers, general partner, managing member or other
applicable governing body of Purchaser, and no other corporate or company action
on the part of Purchaser is necessary to authorize this Agreement.

       

      (b)           The
execution and delivery by Purchaser of this Agreement and Purchaser’s
performance of its obligations under this Agreement (i) are within its
corporate, company or partnership power, (ii) have been duly authorized by all
necessary corporate, company or partnership action, (iii) do not require action
by, or filing with, any governmental authority or any action by any other Person
(other than any action
taken or filing made on or before the Closing Date), (iv) do not violate any
provision of Purchaser’s organizational documents, (v) do not violate any
material provision of law or any order of any governmental authority, in each
case applicable to Purchaser, (f) do not violate, or constitute a breach of, any
agreements to which it is a party (and no default exists on the part of
Purchaser under any agreement to which it is a party), and (g) will not result
in the creation or imposition of any lien, security interest or encumbrance on
any asset of Purchaser.

       

      (c)           This
Agreement has been duly executed and delivered by Purchaser and (assuming the
due authorization, execution, and delivery by the Company) this Agreement
constitutes the legal, valid, and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, and similar laws affecting
creditors’ rights generally and by general principles of equity (whether
considered in a proceeding in equity or at law), and except to the extent the
indemnification provisions contained herein may be limited by applicable federal
or state securities laws.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      2.2           Securities
Matters.  Purchaser
understands and acknowledges that:

       

      (a)           the
Purchased Shares (i) and the offering relating to the Purchased Shares have not
been registered under the Securities Act of 1933, as amended (the “Securities Act”) or
any state securities laws, (ii) based in part upon the representations made by
Purchaser in this Agreement, will be issued in reliance upon an exemption from
the registration and prospectus delivery requirements of the Securities Act
pursuant to Section 4(2) and/or Regulation D thereof, (iii) will be issued in
reliance upon exemptions from the registration and prospectus delivery
requirements of state securities laws which relate to private offerings, and
(iv) will not have the protection of Section 11 of the Securities
Act;

       

      (b)           Purchaser
must therefore bear the economic risk of such investment indefinitely unless a
subsequent disposition thereof is registered under the Securities Act and
applicable state securities laws or is exempt therefrom;

       

      (c)           such
exemptions depend upon, among other things, the bona fide nature of the
investment intent of Purchaser expressed herein;

       

      (d)           the
Purchased Shares (i) are “Restricted Securities” within the meaning of Rule 144
under the Securities Act, (ii) are subject to restrictions on transferability
and resale and (iii) may not be transferred or resold except as permitted under
the Securities Act and applicable state securities laws, pursuant to
registration or exemption therefrom;

       

      (e)           any
transfer of participations in the Purchased Shares or any arrangement for an
economic interest in the Purchased Shares to be held or owned by anyone other
than Purchaser will constitute a violation of these representations and will be
null and void; and

       

      (f)         
  Purchaser will not sell or transfer the Purchased Shares
unless:

       

      (1)           there
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement; or

       

      (2)           Purchaser
shall have notified the Company of the proposed disposition and, upon the
Company’s request, shall have furnished the Company with an opinion of counsel,
which opinion and counsel both are satisfactory to the Company, that such
disposition is exempt from registration of such Purchased Shares under the
Securities Act or any applicable state, foreign or other securities
laws.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      2.3           Investment
Intent.  Purchaser
is acquiring the Purchased Shares for Purchaser’s own account for investment,
and not with a view to any distribution, resale, subdivision or
fractionalization thereof in violation of the Securities Act or any other
applicable domestic or foreign securities law, and Purchaser has no present
plans to enter into any contract, undertaking, agreement or arrangement for any
such distribution, resale, subdivision or fractionalization.

       

      2.4           Investment
Experience.  Purchaser
is experienced in evaluating and investing in securities and acknowledges that
Purchaser (a) is able to fend for himself, herself or itself, as applicable, (b)
can bear the economic risk of Purchaser’s investment in the Company, and (c) has
such knowledge and experience in financial and business matters that Purchaser
is capable of evaluating the merits and risks of the investment in the Purchased
Shares.  To the extent deemed necessary by Purchaser, Purchaser has
retained, at his, her or its own expense, and relied on, appropriate
professional advice regarding the investment, tax and legal merits and
consequences of purchasing and owning the Purchased Shares.  Purchaser
acknowledges that there has never been any representation, guarantee or warranty
made by the Company or any officer, director, employee, agent or representative
of the Company, expressly or by implication, as to (a) the approximate or exact
length of time that Purchaser will be required to remain an owner of the
Purchased Shares, (b) the percentage of profit and/or amount of or type of
consideration, profit or loss to be realized, if any, as a result of this
investment; or (c) that the limited past performance (if any) or experience on
the part of the Company, or any future expectations will in any way indicate the
predictable results of the ownership of the Purchased Shares or of the overall
financial performance of the Company.

       

      2.5           Information and
Access.  Through
his service as a director of the Company, Hsin-Chi Su, the sole owner of the
Purchaser is (i) familiar with the Company’s financial condition, operating
results and prospects and (ii) able to make a complete and informed evaluation
of the Purchaser’s investment in the Company.

       

      2.6           Accredited
Investor.  Purchaser
is an Accredited Investor, as such term is defined in Rule 501(a) under
Regulation D of the Securities Act.

       

      2.7           No Brokerage
Fees.  Purchaser
has not incurred and will not incur, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any transaction contemplated
hereby.

       

      2.8           Illiquidity;
Risk.  Purchaser
understands that (a) substantial restrictions will exist on transferability of
the Purchased Shares, (b) Purchaser may not be able to liquidate Purchaser’s
investment in the Company, (c) any certificates or other instruments
representing Purchased Shares in the Company will bear legends restricting the
transfer thereof, and (d) Purchaser’s investment in the Company entails a very
high degree of risk.

       

      2.9           Address.  The
address set forth on Purchaser’s signature page to this Agreement is the correct
address of Purchaser’s residence or principal place of business, and Purchaser
has no present intention of moving such residence or principal place of business
to any other domestic or foreign jurisdiction.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      2.10        
Reliance.  Purchaser
makes the foregoing representations and warranties with the intent that the
Company and its counsel rely upon them in determining Purchaser’s suitability as
an investor and in establishing an exemption from registration under the
Securities Act and state securities laws for sale of the Purchased Shares to
Purchaser, and Purchaser understands that any inaccuracy of any of its
representations and warranties herein could affect the Company’s ability to
establish an exemption.  Purchaser will not take any position
inconsistent with any of its representations and
warranties.  Purchaser hereby agrees that such representations and
warranties shall survive its purchase of the Purchased Shares.

       

      2.11         Exchange
Listing.  The Company shall  promptly use its
reasonable best efforts to cause the Purchased Shares to be approved for listing
on the American Stock Exchange, subject to official notice of issuance, as
promptly as practicable.

       

      2.12         Legend.  The
Purchaser agrees that all certificates or other instruments representing the
Purchased Shares will bear a legend substantially to the following
effect:

       

      THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO VANTAGE DRILLING COMPANY (THE
“COMPANY”) OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY
OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.

       

      2.13         Post-Closing Covenants of
Purchaser.  Purchaser covenants and agrees to take all actions
required by Purchaser to consummate the initial closing (as defined in the
Purchase Agreement) contemplated by Section 4.1 of the Purchase Agreement by
5:00 p.m. (Houston time) on January 16, 2009 (the “Initial Closing”),
including but not limited to the execution of the Shareholders’ Agreement (as
defined in the Purchase Agreement).  If the Purchaser breaches its
post-closing covenant for the Initial Closing, the Company, at its option, may
terminate this Agreement and the Purchaser shall immediately return certificates
representing the Purchased Shares to Company.

       

      ARTICLE
III

      MISCELLANEOUS

       

      3.1       
   Survival;
Indemnification.  All
representations, warranties and covenants contained in this Agreement and the
indemnification contained in this Section 3.1 shall survive the execution and
delivery of this Agreement by the parties hereto.  Purchaser
acknowledges and understands the meaning and legal consequences of the
representations, warranties and covenants in Article II hereof and that the
Company has relied upon such representations, warranties and covenants in
determining Purchaser’s qualification and suitability to purchase the Purchased
Shares.  Purchaser hereby agrees to indemnify, defend and hold
harmless the Company and its officers, directors, employees, agents and
controlling persons from and against any and all losses, claims, damages,
liabilities, expenses (including attorneys’ fees and disbursements), judgments
or amounts paid in settlement of actions arising out of or resulting from the
untruth of any representation of Purchaser herein or the breach of any warranty
or covenant herein by Purchaser.  Notwithstanding the foregoing,
however, no representation, warranty, covenant or acknowledgment made herein by
Purchaser shall in any manner be deemed to constitute a waiver of any rights
granted to it under the Securities Act or state securities laws.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      3.2           Notices.  Any
notice, request, demand, or other communication required by or permitted to be
given in connection with this Agreement shall be in writing, except as expressly
otherwise permitted herein, and shall be delivered in person, sent by first
class mail (postage prepaid and certified or registered, with return receipt
requested), sent by telefacsimile or similar means of communication, or
delivered by a courier service (charges prepaid), to the respective party at its
address as set forth on the signature page hereof.  Each party may
change its address by notifying each other party of such change in accordance
with the provisions of this Section 3.2.  Any such notice,
request, demand, or other communication shall be deemed to be given (a) when
received, if personally delivered; (b) if mailed, on the third business day
after it is deposited in the United States mail, properly addressed, with proper
postage affixed; (c) if sent by telefacsimile or similar device, when
electronically confirmed (provided that if electronic confirmation is on other
than a business day, then on the first business day following electronic
confirmation); and (d) if sent by overnight courier, 24 hours after delivery to
such courier service.

       

      3.3           Entire
Agreement.  This
Agreement is, and is intended as, a complete statement of all of the terms and
the arrangements between the parties hereto with respect to the matters provided
for herein, and this Agreement supersedes any previous agreements and
understandings between the parties hereto with respect to those
matters.

       

      3.4           Governing
Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
ENGLAND WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

       

      3.5           Binding Effect; No
Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person not party to this Agreement.  No assignment of this
Agreement or of any rights or obligations hereunder may be made by any party (by
operation of law or otherwise) without the prior written consent of the other
party hereto and any attempted assignment without such required consent shall be
void.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      3.6           Amendments.  This
Agreement may be amended, supplemented or modified, and any provision hereof may
be waived, only pursuant to a written instrument making specific reference to
this Agreement signed by each of the parties hereto.

       

      3.7           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.  Each party hereto acknowledges the effectiveness of, and
agrees to accept, facsimile signatures of any other party hereto for purposes of
executing this Agreement; provided, however, that if
Purchaser executes this Agreement by facsimile signature, Purchaser shall
provide the Company with such number of original signature pages as the Company
may specify as soon as is practicable following a request for the same by the
Company.

       

      3.8           Severability.  The
invalidity of any one or more provisions of this Agreement or any instrument
given in connection herewith shall not affect the remaining provisions of this
Agreement or any other agreement or instrument, all of which are used subject to
the condition of their being held valid at law; in the event that one or more of
the provisions of this Agreement should be invalid, or should operate to render
this Agreement or any other agreement or instrument invalid, this Agreement and
such other agreements and instruments shall be construed as if such invalid
provisions had not been included in this Agreement.

       

      3.9           Counsel to the
Company.  Purchaser
hereby acknowledges that the Company and its counsel, Porter & Hedges,
L.L.P., represent the interests of the Company and not those of Purchaser in any
agreement (including this Agreement) to which Purchaser or the Company is a
party.

       

      3.10         Use of
Proceeds.  Purchaser
understands and acknowledges that the proceeds from the sale of the Purchased
Shares hereunder will be used (a) first to fund Deepwater’s pro-rata portion of
the Performance Bond and (b) thereafter for general corporate
purposes.

       

      [Signatures
Appear on the Following Page]

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Company and Purchaser have executed this Subscription
Agreement as of the date first above written.

       

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	 
      	
                                                                COMPANY:

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                                                VANTAGE
      DRILLING COMPANY,

                                                              
	 
      	
                                                                a
      Cayman Islands exempted company

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                                                By:

                                                              	
                                                                /s/ Paul
      A. Bragg

                                                              
	 
      	
                                                                Name:

                                                              	
                                                                Paul
      A. Bragg

                                                              
	 
      	
                                                                Title:

                                                              	
                                                                Chairman
      and Chief Executive Officer

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                                Address:

                                                              	
                                                                777
      Post Oak Blvd, Ste 610

                                                              
	 
      	 
      	 
      	
                                                                Houston,
      Texas 77056

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                                                PURCHASER:

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                                                F3
      CAPITAL,

                                                              
	 
      	
                                                                a
      Cayman Islands exempted company

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                                                By:

                                                              	
                                                                /s/ Hsin
      Chi Su

                                                              
	 
      	
                                                                Name:

                                                              	
                                                                Hsin
      Chi Su

                                                              
	 
      	
                                                                Title:

                                                              	
                                                                President

                                                              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                                Address:

                                                              	 
      
	 
      	 
      	 
      	 
      

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
         

         

        [Signature
Page to Subscription Agreement - F3 Capital]Unassociated Document

    

     

     

    FORBEARANCE
AGREEMENT

     

    FORBEARANCE AGREEMENT (this
“Agreement”),
dated of as January 15, 2009, by and between TXP CORPORATION, a Nevada
corporation (the “Company”), and YA GLOBAL INVESTMENTS, L.P.
(formerly, CORNELL CAPITAL PARTNERS, LP) (“YA
Global”).  All capitalized terms used herein shall have the
respective meanings assigned thereto in the Transaction Documents (as defined
below) unless otherwise defined herein.

     

     

    

     

     

    W I T N E S S E T
H:

     

     

    WHEREAS, on March 30, 2007,
the parties hereto entered into a Securities Purchase Agreement (the “2007 Securities Purchase
Agreement”);

     

     

    WHEREAS, pursuant to the 2007
Securities Purchase Agreement, YA Global purchased from the Company, among other
things, (i) Secured Convertible Note No. TXP-2-1 which was issued on March 30,
2007 in the original principal amount of $4,000,000, as amended, and (ii)
Secured Convertible Note No. TXP-2-2 which was issued on December 11, 2007 in
the original principal amount of $1,000,000, as amended (collectively, the
“2007
Debentures”);

     

     

    WHEREAS, on May 29, 2008, the
parties hereto entered into a Securities Purchase Agreement (the “2008 Securities Purchase
Agreement” and collectively with the 2007 Securities Purchase Agreement,
the “Securities
Purchase Agreements”);

     

     

    WHEREAS, pursuant to the 2008
Securities Purchase Agreement, YA Global purchased from the Company (i) Secured
Convertible Debenture No. TXPO 3-1 which was issued on May 29, 2008 in the
original principal amount of $3,000,000 and (ii) Secured Convertible Debenture
No. TXPO 3-2 which was issued on August 31, 2008 in the original principal
amount of $1,500,000 (collectively, the “Debentures,” and
along with the 2007 Debentures, the “Debentures”);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    WHEREAS, pursuant to the
Securities Purchase Agreements,  the Company has issued to YA Global
the following warrants (collectively, the “Existing Warrants”)
(i) Warrant issued on March 30, 2007 for 3,850,000 shares (Warrant No:
CCP-1-2/A), (ii) Warrant issued on June 5, 2006 for 3,700,000 shares (Warrant
No: CCP-2-2/A), (iii) Warrant issued on May 29, 2008 for 8,870,000 shares
(Warrant No: TXPO-3-1), and (iv) Warrant issued on August 13, 2008 for 4,430,000
shares (Warrant No: TXPO-3-2);

     

    WHEREAS, the Securities
Purchase Agreements, the Debentures, the Warrants, and all documents and
instruments entered into in connection therewith shall be referred to herein as
the “Transaction
Documents”) and capitalized terms which are used but not defined herein
have the meaning given thereto in the Transaction Documents;

     

    WHEREAS, the outstanding
principal and accrued and unpaid interest on the Debentures is as
follows:

     

    
      
        	
                Debenture
      Description

              	
                Principal
      Outstanding

              	
                Accrued
      and Unpaid Interest (as of December 17, 2008)

              
	
                Secured
      Convertible Debenture due issued on March 30, 2007 in the original
      principal amount of $4,000,000 (TXP-2-1)

              	
                $4,000,000

              	
                $347,027

              
	
                Secured
      Convertible Debenture issued on December 11, 2007 in the original
      principal amount of US $1,000,000 (TXP-2-2)

              	
                $1,000,000

              	
                $103,671

              
	
                Secured
      Convertible Debenture issued on May 29, 2008 in the original amount of
      US$3,000,000 (TXPO 3-1)

              	
                $3,000,000

              	
                $199,232

              
	
                Secured
      Convertible Debenture issued on August 13, 2008 in the original amount of
      US$1,500,000 (TXPO 3-2)

              	
                $1,500,000

              	
                $62,137

              

      

    

    

     

    WHEREAS, the Company has
failed to make payments pursuant to the Debentures that were due on December 15,
2008 (the “Payment
Defaults”);

     

    WHEREAS, the Company has
failed to meet certain Milestones by December 15, 2008, the deadline to meet
such Milestones (the “Milestone
Defaults”);

     

    WHEREAS, in addition, the
Company has breached the terms of the Transaction Documents as set forth in the
notice of default dated December 11, 2008 (such breaches collectively along with
the Payment Defaults and the Milestone Defaults shall be referred to herein as
the “Existing
Defaults”);

     

    WHEREAS, YA Global is willing
to agree to forbear from exercising certain of its rights and remedies on the
terms and conditions specified herein;

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    NOW, THEREFORE, in
consideration of the foregoing, and the respective agreements, warranties and
covenants contained herein, the parties hereto agree, covenant and warrant as
follows:

     

    
      	
               
      

            	
              1.

            	
              ACKNOWLEDGMENTS.

            

    

     

    
      	
               
      

            	
              a.

            	
              Acknowledgement of
      Obligations.  The Company hereby acknowledges, confirms
      and agrees that as of the date hereof, the Company is indebted to YA
      Global under the Debentures and the Transaction Documents in the
      outstanding principal amount plus accrued and unpaid interest thereon set
      forth in the first Whereas clause above.  In addition to the
      principal and interest set forth herein, all interest accrued and accruing
      hereafter and all liquidated damages, fees, costs, expenses and other
      charges now or hereafter payable by the Company to YA Global under the
      Transaction Documents (collectively, the “Obligations”),
      are unconditionally owing by the Company to YA Global, without offset,
      defense or counterclaim of any kind, nature or description
      whatsoever.

            

    

     

    
      	
               
      

            	
              b.

            	
              Acknowledgement of
      Security Interests.  The Company hereby acknowledges,
      confirms and agrees that YA Global has and shall continue to have valid,
      enforceable and perfected first-priority liens upon and security interests
      in the Pledged Property heretofore granted to YA Global pursuant to (i)
      the Security Agreement between the Company and YA Global dated March 29,
      2008, (ii) the intellectual property security agreement between the
      Company and YA Global dated March 29, 2008, (iii) the Security Agreement
      between the Company and YA Global dated March 30, 2007, or otherwise
      granted to or held by YA Global.

            

    

     

    
      	
               
      

            	
              c.

            	
              Binding Effect of
      Documents.  The Company hereto acknowledges, confirms and
      agrees that:  (a) each of the Transaction Documents to
      which it is a party has been duly executed and delivered to YA Global by
      the Company, and each is in full force and effect as of the date hereof,
      (b) the agreements and obligations of the Company contained in such
      documents and in this Agreement constitute the legal, valid and binding
      obligations of the Company, enforceable against each in accordance with
      their respective terms, and (c) YA Global is and shall be entitled to
      the rights, remedies and benefits provided for in the Transaction
      Documents and applicable law.

            

    

     

    
      	
               
      

            	
              2.

            	
              FORBEARANCE IN RESPECT
      OF CERTAIN EVENTS OF
DEFAULT.

            

    

     

    
      	
               
      

            	
              a.

            	
              Acknowledgement of
      Default.  The Company hereby acknowledges and agrees that
      the Existing Defaults have occurred and are continuing, and each
      constitutes an Event of Default and entitles YA Global to exercise its
      rights and remedies under the Transaction Documents, applicable law or
      otherwise.  The Company further represents and warrants that as
      of the date hereof no other Event of Default under the Transaction
      Documents exists.  YA Global has not waived, presently do not
      intend to waive and may never waive such Existing Defaults and nothing
      contained herein or the transactions contemplated hereby shall be deemed
      to constitute any such waiver.  The Company hereby acknowledges
      and agrees that YA Global has the presently exercisable right to declare
      the Obligations to be immediately due and payable under the terms of the
      Transaction Documents.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              b.

            	
              Forbearance.

            

    

     

    
      	
               
      

            	
              i.

            	
              In
      reliance upon the representations, warranties and covenants of the Company
      contained in this Agreement, and subject to the terms and conditions of
      this Agreement and any documents or instruments executed in connection
      herewith, YA  Global agrees to forbear from exercising its
      rights and remedies under the Transaction Documents or applicable law in
      respect of or arising out of the Existing Defaults, subject to the
      conditions, amendments and modifications contained herein for the period
      (the “Forbearance
      Period”) commencing on the date hereof and ending upon the
      occurrence of any of the following events: (i) the Company fails to comply
      with any term, condition, or agreement set forth in this Agreement, or
      (ii) any occurrence or existence of any Event of Default, other than the
      Existing Defaults.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Upon
      the termination or expiration of the Forbearance Period, the agreement of
      YA Global to forbear shall automatically and without further action
      terminate and be of no force and effect, it being expressly agreed that
      the effect of such termination will be to permit YA Global to exercise
      such rights and remedies immediately, including, but not limited to, the
      acceleration of all of the Obligations without any further notice, passage
      of time or forbearance of any kind.  This Agreement shall be
      deemed to satisfy any and all requirements by YA Global to notify the
      Company of the occurrence of the Existing Defaults and satisfies any
      obligation by YA Global to give the Company an opportunity to cure the
      Existing Defaults.

            

    

     

    
      	
               
      

            	
              c.

            	
              No Other Waivers;
      Reservation of Rights.

            

    

     

    
      	
               
      

            	
              i.

            	
              YA
      Global has not waived, is not by this Agreement waiving, and has no
      intentions of waiving, any Events of Default which may be continuing on
      the date hereof or any Events of Default which may occur after the date
      hereof (whether the same or similar to the Existing Defaults or
      otherwise), and YA Global has not agreed to forbear with respect to any of
      its rights or remedies concerning any Events of Default (other than,
      during the Forbearance Period, the Existing Defaults to the extent
      expressly set forth herein), which may have occurred or are continuing as
      of the date hereof or which may occur after the date
    hereof.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Subject
      to Section 2(b) above (solely with respect to the Existing Defaults),
      YA Global reserves the right, in its discretion, to exercise any or all of
      its rights and remedies under the Transaction Documents as a result of any
      Events of Default which may be continuing on the date hereof or any Event
      of Default which may occur after the date hereof, and YA Global has not
      waived any of such rights or remedies, and nothing in this Agreement, and
      no delay on its part in exercising any such rights or remedies, should be
      construed as a waiver of any such rights or
  remedies.

            

    

     

    
      	
               
      

            	
              3.

            	
              In
      consideration of the agreements set forth herein, the Company shall amend,
      as of the date hereof, the Exercise Price of all the Existing Warrants to
      $0.01 per share.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              4.

            	
              PAYMENTS
      UNDER THE DEBENTURES.

            

    

     

    
      	
               
      

            	
              a.

            	
              The Company shall make payment
      under the Debentures in the aggregate amount of $250,000 per month
      beginning on March 20, 2009, and continuing on the 20th day (or next business day, if
      such date is not a business day) of each successive calendar month
      thereafter (each, a “Payment
      Due Date”).  All such payment
      shall be made in accordance with the procedures for Installment Payments
      set forth in 2008 Debentures (i.e., such payments may be made in cash
      pursuant to a Company Redemption, or in Common Stock pursuant to a Company
      Conversion).   YA Global shall apply all such payments to
      principal and accrued interest owed under the Debentures in its sole
      discretion.

            

    

     

    
      	
               
      

            	
              b.

            	
              YA Global agrees to defer all
      payments required to be made under the Debentures prior to March 20, 2009,
      until the earlier of (i) the expiration of the Forbearance Period, or (ii)
      March 30, 2010 (the maturity date of the first
      Debenture).

            

    

     

    
      	
               
      

            	
              c.

            	
              In
      addition to the payments set forth above, the Company shall make (i) a
      balloon payment in the amount of $250,000 which shall be due and payable
      on June 30, 2009, and (ii) a balloon payment due and payable on February
      15 of each year beginning in 2010 in the amount equal to one third of the
      Company’s gross profit for the full year immediately preceding the year in
      which such payment is due.  These payments shall be made in the
      same manner, and applied by YA Global in the same manner as described in
      Section 4.a. above.

            

    

     

    
      	
               
      

            	
              d.

            	
              In
      addition to the payments to be made to YA Global in accordance with this
      Agreement, all amounts outstanding under each of Debenture shall be due
      and payable on such Debenture’s maturity
date.

            

    

     

    
      	
               
      

            	
              5.

            	
              COVENANTS

            

    

     

    
      	
               
      

            	
              a.

            	
              Milestones.   The
      Company covenants and agrees to meet each of the following corporate
      milestones (each a “Corporate
      Milestone”):

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      Company shall achieve positive cash flow from operations for the month
      ending on August 30, 2009, and cash flow from operations shall remain
      positive for each quarter
thereafter.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Implement
      an acceptable cost cutting/growth plan approved by YA Global no later than
      January 30, 2009.

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              iii.

            	
              Enter
      into an acceptable agreement to YA Global with Cambridge Industries Group
      (“CIG”)
      by January 30, 2009 pursuant to which products representing at least
      $2,000,000 of the Company’s current and future orders will be manufactured
      and supplied at prices which result in average profit margins to the
      Company of at least 25%.

            

    

     

    
      	
               
      

            	
              iv.

            	
              Enter
      into an acceptable agreement to YA Global with CIG by January 30, 2009
      pursuant to which CIG agrees to fund the Company’s iPhotonics ONT
      operations per the agreed upon cost cutting/growth plan as referenced in
      Section 5(a)(ii) above through March 31, 2009 by paying the production
      margin proceeds from described in Section 5(a)(iii) above in
      advance.

            

    

     

    
      	
               
      

            	
              i.

            	
              Retain
      a restructuring officer acceptable to YA Global by January 23, 2009, which
      restructuring officer shall have full discretion to approve all Company
      expenditures and execute the business plan as referenced in Section
      5(a)(ii) above.

            

    

     

    Failure
to timely satisfy any Corporate Milestone shall be an Event of
Default.

     

    
      	
               
      

            	
              b.

            	
              Budgets.  The
      Company shall enter into payment arrangements and/or standstill agreements
      to satisfy all of its accounts payable and provide to YA Global a budget
      (the “Budget”)
      detailing such payments and arrangements on terms that are acceptable to
      YA Global by February 10, 2009.

            

    

     

    
      	
               
      

            	
              c.

            	
              Deposit Control
      Account.  Reference is made to the Control
      Account Agreement (the “Control Account
      Agreement”) dated August 6, 2008, among Comerica Bank, a national
      banking association (“Bank”), the
      Company and YA Global.  On December 11, 2008, YA Global
      exercised its rights pursuant to the Control Account Agreement to direct
      the disposition of the Deposits (as defined in the Control Account
      Agreement) in the Control Account (as defined in the Control Account
      Agreement).  Upon delivery of an acceptable Budget as set forth
      in Section 5(b) above, YA Global shall notify the Bank that it is
      releasing its notice of exclusive control and the Company may use the
      Control Account solely to pay expenses in accordance with such approved
      Budget.  The Company hereby agrees that it will not open or cause to
      be opened any cash accounts whether with the Bank or any other bank
      without YA Global’s prior written
consent.

            

    

     

    
      	
               
      

            	
              d.

            	
              Increase of Authorized
      Common Stock.  The Company shall obtain the requisite approval
      of its shareholders via shareholder consent and file an information
      statement with the Securities and Exchange Commission by March 31, 2009
      for the sole purpose of increasing the number of authorized shares of
      Common Stock to at least 700,000,000.  Management shall vote all of
      its shares in favor of increasing the number of authorized shares of
      Common Stock.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              e.

            	
              Further
      Assurances. The Company shall, from and after the execution of this
      Agreement, execute and deliver to YA Global whatever additional documents,
      instruments, and agreements YA Global may require in order to correct any
      document deficiencies, or to vest or perfect the Transaction Documents and
      the collateral granted therein more securely in YA Global and/or to
      otherwise give effect to the terms and conditions of this Agreement, and
      hereby authorize YA Global to file any financing statements (including
      financing statements with a generic description of the collateral such as
      “all assets”), and take any other normal and customary steps, YA Global
      deems necessary to perfect or evidence YA Global’s security interests and
      liens in any such collateral.

            

    

     

    
      	
               
      

            	
              f.

            	
              Non-Interference. 
      From and after the termination of the Forbearance Period, the Company
      agrees not to interfere with the exercise by YA Global of any of its
      rights and remedies.  The Company further agrees that it shall not
      seek to restrain or otherwise hinder, delay, or impair YA Global’s efforts
      to realize upon any collateral granted to YA Global, or otherwise to
      enforce its rights and remedies pursuant to the Transaction
      Documents.  The provisions of this Paragraph shall be specifically
      enforceable by YA Global.

            

    

     

    
      	
               
      

            	
              g.

            	
              Cross
      Default.  The Company hereby acknowledges and agrees that any
      default or Event of Default under this Agreement or under any Transaction
      Document shall constitute an Event of Default under each other Transaction
      Document.

            

    

     

    
      	
               
      

            	
              6.

            	
              RELEASE.  In
      exchange for the accommodations made by YA Global herein, the Company does
      hereby, on behalf of itself and its agents, representatives, attorneys,
      assigns, heirs, subsidiaries, executors and administrators (collectively,
      “Company
      Parties”) RELEASE AND FOREVER DISCHARGE YA Global and its
      subsidiaries and its respective affiliates, parents, joint ventures,
      officers, directors, shareholders, interest holders, members, managers,
      employees, consultants, representatives, successors and assigns, heirs,
      executors and administrators (collectively, “Buyer Parties”)
      from all causes of action, suits, debts, claims and demands whatsoever
      known or unknown, at law, in equity or otherwise, which the Company
      Parties ever had, now has, or hereafter may have on or prior to the date
      hereof, and any claims for reasonable attorneys’ fees and costs, and
      including, without limitation, any claims relating to fees, penalties,
      liquidated damages, and indemnification for losses, liabilities and
      expenses.  The release contained in this Section is effective
      without regard to the legal nature of the claims raised and without regard
      to whether any such claims are based upon tort, equity, or implied or
      express contract.  It is expressly understood and agreed that
      this release shall operate as a clear and unequivocal waiver by the
      Company Parties of any such claim
whatsoever.

            

    

     

    
      	
               
      

            	
              7.

            	
              PROVISIONS OF GENERAL
      APPLICATION

            

    

     

    
      	
               
      

            	
              a.

            	
              Effect of this
      Agreement.  Except as modified pursuant hereto, no other
      changes or modifications to the Transaction Documents are intended or
      implied and in all other respects the Transaction Documents are hereby
      specifically ratified, restated and confirmed by all parties hereto as of
      the effective date hereof.  To the extent of conflict between
      the terms of this Agreement and the other Transaction Documents, the terms
      of this Agreement shall control.  The Transaction Documents and
      this Agreement shall be read and construed as one
    agreement.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              b.

            	
              Governing
      Law.  This Agreement shall be interpreted according to
      the laws of the State of New Jersey and shall inure to the benefit of and
      be binding upon the parties hereto and their respective successors and
      assigns.  Any notices, demands, consents, other writings or
      communications permitted or required by this Agreement shall be given in
      the manner and to the address as set forth in the Transaction
      Documents.

            

    

     

    
      	
               
      

            	
              c.

            	
              Mutual Waiver of Jury
      Trial.  BECAUSE DISPUTES ARISING IN CONNECTION WITH
      COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
      BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE
      AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
      DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
      LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
      BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
      WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING
      BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT OR
      OTHERWISE BETWEEN FACTOR AND CLIENT ARISING OUT OF, CONNECTED WITH,
      RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
      CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER FACTORING DOCUMENTS OR
      THE TRANSACTIONS RELATED THERETO.

            

    

     

    [SIGNATURE
PAGE IMMEDIATELY TO FOLLOW]

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    IN WITNESS WHEREOF, this
Agreement is executed and delivered as of the day and year first above
written.

     

    
      
        	 
      	
                TXP
      Corporation

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:
      /s/ Michael C.
      Shores

              
	 
      	
                Name:
      Michael C. Shores

              
	 
      	
                Title:  
      Chief Executive Officer

              
	 
      	 
      
	 
      	
                YA
      Global Investments, L.P.

              
	 
      	 
      
	 
      	
                By:           Yorkville
      Advisors, LLC

              
	 
      	
                Its:           Investment
      Manager

              
	 
      	 
      
	 
      	
                By:
      /s/ Troy
      Rillo                                                             

              
	 
      	
                Name: Troy
      Rillo               

              
	 
      	
                Title:  
      Senior Managing Director

              

      

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    SCHEDULE
A

    

    TRANSACTION
DOCUMENTS

    

    

    

    

    

    
      
      

    

    

    
      
         

      

      
        10

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