AGREEMENT
AGREEMENT
AGREEMENT
(this
“Agreement”)
dated
as of September 18, 2007 by and among Solomon Technologies, Inc., a
Delaware corporation (the “Company”),
Woodlaken LLC (“Woodlaken”),
Jezebel Management Corporation (“Jezebel”),
Pinetree (Barbados) Inc. (“Pinetree”),
Xxxxx
Family LLC (“Xxxxx”),
F.
Xxx Xxxxxxx (“Xxxxxxx”),
Xxxxx
and Xxxxxxx Xxxxxxxxx (“Xxxxxxxxx”),
Pascal Partners, LLC (“Pascal”),
Xxxxxx Xxxxxxxx (“Xxxxxxxx”),
Millennium Trust Company LLC Custodian FBO Xxxxxx Xxxxxx Rollover XXX 00X000000
(“Xxxxxx”)
and
Millennium Trust Company LLC Custodian FBO Xxxxxx Xxxxxxxx XXX Rollover Account
#00X000000 (“Xxxxxxxx
XXX,”
and
together with Woodlaken, Jezebel, Pinetree, Xxxxx, Xxxxxxx, Xxxxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxxx, the “Investors”).
WITNESSETH:
WHEREAS,
the
Company has sold $1,712,085 aggregate principal amount of Senior Secured
Promissory Notes to the Investors in the amounts set forth on Schedule 1 (the
“Notes”);
WHEREAS,
the
maturity date of each of the Notes is September 30, 2007;
WHEREAS,
the
Investors and the Company now wish to amend the Notes to extend their maturity
date to September 7, 2008,
to
provide that the maturity date of the Notes shall be subject to two further
extensions in the event certain conditions set forth below are met, including
the payment or accrual of a portion of the principal balance of the Notes,
and
to include a cross-default provision in the Notes whereby the Notes will be
in
default in the event the Company defaults on its obligations under other
indebtedness;
WHEREAS,
in
consideration of each Investor’s willingness to extend the maturity of the
Notes, the Company intends to compensate the Investors by paying each Investor
an amount in cash equal to 7% of the principal amount of Notes, or fraction
thereof, held by such Investor on September 30, 2007 (the “Inducement Payment”),
which amount shall be added to the principal amount of such Investor’s Notes;
and
WHEREAS,
the
Company wishes to offer to sell to each of the Investors, for $100 in cash
(payable by deduction from the Inducement Payment payable to such Investor),
the
right to convert such Investor’s Notes into Common Stock at a conversion price
of $0.35 per share at any time and from time to time, if but only if the Company
is not then prevented from issuing new shares of Common Stock to such Investor
by the terms of a Conflicting Agreement (as defined below).
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to
be legally bound, hereby agree as follows:
1. AMENDMENT
OF NOTES.
1.1. Extension
of Maturity Date.
Each of
the Notes is hereby amended by striking the maturity date of September 30,
2007,
and substituting therefor a new maturity date of September 7, 2008 (the
“Maturity Date”). Notwithstanding the foregoing, the Maturity Date shall be
subject to further extension as follows:
(a)
If
there
is no Registration Statement effective by September 7, 2008, the Maturity Date
will be extended automatically to December 31, 2008, upon notice to the holders
of the Notes (the “Holders”) and the accrual or payment of an amount equal to 5%
of each Holder’s principal balance.
(b)
If
there
is no Registration Statement effective by December 31, 2008, the Maturity Date
will be further extended automatically to April 17, 2009, upon notice to the
Holders and the accrual or payment of an additional amount equal to 5% of each
Holder’s principal balance.
(c) For
purposes of this Section 1.1, the term “Registration Statement” shall have the
meaning set forth in that certain Securities Purchase Agreement dated as of
August 30, 2007, by and among the Company and each of the parties identified
on
the signature pages thereto.
1.2 Cross-Default.
Section
1.1 of each of the Notes is hereby amended by inserting the following
immediately after clause (v) thereof:
“(vi)
the
Company or any subsidiary shall default on any of its obligations under any
mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or by which
there
may be secured or evidenced, any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement that (a) involves an
obligation greater than $150,000, whether such indebtedness now exists or shall
hereafter be created, and (b) results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable;”
1.3 Conversion
Right.
Each
Investor may elect, by so indicating opposite his, her or its signature below,
to purchase a conditional right to convert any or all of the principal and
interest due on such Investor’s Notes into shares of Common Stock at a
conversion price of $0.35 per share at any time and from time to time (a
“Conversion Right”), subject to the condition that at the time of any proposed
conversion the Company is not prevented from issuing such shares by the terms
of
a Conflicting Agreement. By electing to purchase a Conversion Right, the
Investor authorizes the Company to deduct $100 from the Inducement Payment
otherwise due to such Investor in payment for the Conversion Right, and
acknowledges that such payment is non-refundable. If an Investor purchases
a
Conversion Right, such Investor’s Notes shall be deemed amended by the insertion
of the following immediately after Section 3.9 thereof:
2
“3.10 Optional
Conversion.
The
Holder may, at its option at any time and from time to time (and in lieu of
the
Holder accepting repayment of principal and accrued interest so converted),
convert any or all of the outstanding principal of and accrued and unpaid
interest under this Note into shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock”), at a conversion price per share equal to
$0.35 (subject to adjustment in the event of a stock split, combination,
reclassification or like event with respect to the Common Stock), but only
if
and to the extent the Company is not at such time prevented from issuing such
shares by the terms of any agreement to which the Company is a party on
September 18, 2007, and at the time of any attempted conversion of this Note
(a
“Conflicting Agreement”). The Holder may exercise such conversion right by
giving written notice to the Company, which notice shall set forth the amount
of
outstanding principal and interest to be converted and shall be accompanied
by
this Note. No
fractional shares will be issued upon conversion of this Note. In lieu of any
fractional share to which Lender would otherwise be entitled, the Company will
pay the cash value of that fractional share to the Holder, as provided herein.
Upon the conversion of any principal and interest pursuant to this Note, the
Company will continue to be bound by and subject to all of its obligations
and
liabilities pursuant to this Note with respect to any portion of the principal
and interest of this Note remaining outstanding after such conversion. Within
10
business days after receipt of an exercise notice and this Note from the Holder,
the Company will (A) in the event the Company is not then prevented from issuing
new shares to the Holder by any Conflicting Agreement, issue to the Holder
(i) a
replacement note in an amount equal to the remaining outstanding principal
of
the Note, if any, which replacement note shall be otherwise identical in form
and substance to this Note, and (ii) a certificate or certificates for the
number of shares of Common Stock to which the Holder is entitled (bearing such
legends as may be required by applicable state and federal securities laws
in
the opinion of legal counsel of the Company), together with a check payable
to
the Holder for any cash amounts payable for any fractional share resulting
from
the conversion of this Note, or (B) in the event the Company is prevented from
issuing new shares to the Holder by a Conflicting Agreement, so notify the
Holder in a writing accompanied by this Note, whereupon the exercise notice
shall be deemed null and void.”
1.4 Exception
to Payment of Notes Pari
Passu.
To
facilitate the Conversion Right set forth in Section 1.3 above, the second
paragraph of each of the Notes following the principal amount and date thereof
is hereby deleted in its entirety and replaced with the following:
“This
Note is one of a series of substantially similar notes of the Company with
an
aggregate principal amount of approximately $1,831,930 (collectively, the
“Notes”). To the extent that any of the Notes having the right to be converted
into equity securities of the Company are not sooner converted, the Notes shall
be payable pari passu
with
each other but shall at all times be senior to any other indebtedness of the
Company in right of payment of principal, interest and all other sums due or
payable, and all other present and future indebtedness and obligations of the
Company, other than accrued taxes or taxes due and payable.
3
1.5 Full
Force and Effect.
Except
as amended hereby, the terms of the Notes, as previously amended, remain in
full
force and effect.
2. Inducement
Payment.
Promptly upon execution of this Agreement by the Investors, and in consideration
thereof, the Company shall pay each Investor an amount in cash equal to 7%
of
the principal amount of each Note, or fraction thereof, held by such Investor
on
the date hereof, which amounts shall be added to the principal amount of such
Investor’s Notes; provided,
however,
that if
an Investor has elected to purchase a Conversion Right, then the Company shall
deduct $100 from the value of the Common Stock or cash delivered pursuant to
this Section 2.
3. MISCELLANEOUS.
3.1. Law
Applicable.
This
Agreement shall be governed by and construed pursuant to the laws of the State
of New York, without giving effect to conflicts of laws principles.
3.2. Counterparts.
This
Agreement may be executed in counterparts, each of which shall be an original,
but all of which together shall constitute one and the same instrument and
it
shall not be necessary in making proof of this Agreement to account for all
such
counterparts.
[Signatures
appear on following pages]
4
IN
WITNESS WHEREOF,
the
undersigned have hereunto set their hands to this Agreement as of the day and
year first above written.
|
COMPANY:
|
||
|
SOLOMON
TECHNOLOGIES, INC.
|
||
|
By:
/s/ Xxxx X.
Xxxxxx
|
||
|
Name:
Xxxx X. Xxxxxx
|
||
|
Title:
Chief Executive Officer
|
||
|
WOODLAKEN
LLC
|
||
|
Conversion
Right: x Yes o
No
|
By:
/s/
Xxxx X.
Xxxxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxxxx
|
||
|
Title:
Manager
|
||
|
JEZEBEL
MANAGEMENT CORPORATION
|
||
|
Conversion
Right: xYes
o No
|
By:
/s/
Xxxxxxx X. X’Xxxxxx
|
|
|
Name:
Xxxxxxx X. X’Xxxxxx
|
||
|
Title:
President
|
||
|
PINETREE
(BARBADOS) INC.
|
||
|
Conversion
Right: xYes
o No
|
By:
/s/ J. Xxxxxx Xxxxxx
|
|
|
Name:
J. Xxxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
XXXXX
FAMILY LLC
|
||
|
Conversion
Right: xYes
o No
|
By:
/s/
Xxxxxxx X.
Xxxxx
|
|
|
Name:
Xxxxxxx
X. Xxxxx
|
||
|
Title:
Manager
|
5
|
Conversion
Right: xYes
o No
|
/s/
F. Xxx Xxxxxxx
|
|
|
F.
Xxx Xxxxxxx
|
||
|
/s/
Xxxxx Xxxxxxxxx
|
||
|
Xxxxx
Xxxxxxxxx
|
||
|
Conversion
Right: xYes
o No
|
||
|
/s/
Xxxxxxx Xxxxxxxxx
|
||
|
Xxxxxxx
Xxxxxxxxx
|
||
|
PASCAL
PARTNERS, LLC
|
||
|
Conversion
Right: xYes o No
|
By:
/s/
Xxxx
Xxxxxxxxx
|
|
| Name: Xxxx Xxxxxxxxx | ||
| Title: Managing Member | ||
|
Conversion
Right: xYes
o No
|
/s/
Xxxxxx
Xxxxxxxx
|
|
| Xxxxxx Xxxxxxxx | ||
| Millennium Trust Company LLC Custodian | ||
| FBO Xxxxxx Xxxxxx Rollover XXX 00X000000 | ||
|
Conversion
Right: xYes
o No
|
By:
/s/
Xxxxxx Xxxxxx
|
|
|
Name:
Xxxxxx Xxxxxx
|
||
|
Title:
|
||
|
Millennium
Trust Company LLC Custodian
|
||
|
FBO
Xxxxxx Xxxxxxxx XXX Rollover
|
||
|
Account
#00X000000
|
||
|
Conversion
Right: x Yes
o No
|
By:
/s/
Xxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
||
|
Title:
|
6
SCHEDULE
1
Notes
|
Name
of Investor
|
Date
Issued
|
Principal
Amount*
|
|||||
|
Woodlaken
LLC
|
March
7, 2005
|
$
|
40,000.00
|
||||
|
Jezebel
Management Corporation
|
March
16, 2005
|
$
|
100,000.00
|
||||
|
Pinetree
(Barbados) Inc.
|
April
1, 2005
|
$
|
50,000.00
|
||||
|
Woodlaken
LLC
|
April
1, 2005
|
$
|
10,000.00
|
||||
|
Jezebel
Management Corporation
|
April
18, 2005
|
$
|
75,000.00
|
||||
|
Xxxxx
Family LLC
|
May
25, 2005
|
$
|
100,000.00
|
||||
|
Jezebel
Management Corporation
|
July
8, 2005
|
$
|
75,000.00
|
||||
|
Jezebel
Management Corporation
|
August
16, 2005
|
$
|
150,000.00
|
||||
|
Jezebel
Management Corporation
|
September
15, 2005
|
$
|
150,000.00
|
||||
|
Jezebel
Management Corporation
|
November
18, 2005
|
$
|
100,000.00
|
||||
|
Pinetree
(Barbados) Inc.
|
November
18, 2005
|
$
|
100,000.00
|
||||
|
F.
Xxx Xxxxxxx
|
March
20, 2006
|
$
|
25,000.00
|
||||
|
Woodlaken
LLC
|
March
31, 2006
|
$
|
72,000.00
|
||||
|
Xxxxx
and Xxxxxxx Xxxxxxxxx
|
April
7, 2006
|
$
|
100,000.00
|
||||
|
Pascal
Partners, LLC
|
April
10, 2006
|
$
|
100,000.00
|
||||
|
Xxxxx
Family LLC
|
May
23, 2006
|
$
|
200,000.00
|
||||
|
Xxxxxx
Xxxxxxxx
|
June
13, 2006
|
$
|
25,000.00
|
||||
|
Millennium
Trust Co. LLC Custodian FBO Xxxxxx Xxxxxx Rollover XXX
00X000000
|
July
3, 2006
|
$
|
100,000.00
|
||||
|
F.
Xxx Xxxxxxx
|
October
13, 2006
|
$
|
25,000.00
|
||||
|
Millennium
Trust Co. LLC Custodian FBO Xxxxxx Xxxxxx Rollover XXX
00X000000
|
October
13, 2006
|
$
|
85,000.00
|
||||
|
Xxxxxx
Xxxxxxxx
|
October
31, 2006
|
$
|
11,000.00
|
||||
|
Millennium
Trust Co. LLC Custodian FBO Xxxxxx Xxxxxxxx XXX Rollover Account
#00X000000
|
October
31, 2006
|
$
|
19,085.00
|
||||
|
Total
|
$
|
1,712,085.00
|
|||||
__________________________________
*
Prior
to accrual of inducement payments.
