DEBT CONVERSION AGREEMENT
Exhibit
10.13
Debt
Conversion Agreement (this “Agreement”) dated as of April 1, 2006 between Xxxx
X. Xxxxxxxxxxx (the “Lender”) and American DG Energy Inc. (the
“Borrower”).
The
Lender is the holder of Demand Promissory Notes dated as of March 26, 2003,
January 20, 2004, March 24, 2004, April 21, 2004 and June 3, 2004 issued by the
Borrower (formerly American DG Inc.) in the aggregate principal amount of Nine
Hundred Thousand Dollars ($900,000.00) (collectively the “Notes”).
The
Lender is willing to convert the principal amount of the Notes and a portion of
the accrued and unpaid interest on the Notes into (a) shares of the Common
Stock, par value $.001 per share of the Borrower (the “Common Stock”), and (b)
the Borrower’s 8% Senior Convertible Debentures Due 2011 (the “Debentures”), and
the Lender is willing to accept such conversion.
NOW,
THEREFORE, the undersigned, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby agree as
follows:
1. (a) As
of the date hereof, the Lender hereby agrees to convert Notes in the principal
amount of Three Hundred Fifty Thousand Dollars ($350,000.00) into shares of
Common Stock at a conversion rate of Seventy Cents ($.70) per share of Common
Stock or 500,000 shares of Common Stock (the “Shares”), (b) as of April 15,
2006, the Lender agrees to convert Notes in the principal amount of Five Hundred
Fifty Thousand Dollars ($550,000.00) into Five Hundred Fifty Thousand Dollars
($550,000.00) principal amount of the Debentures, (c) as of the date hereof, the
Lender agrees to accept Debentures in the principal amount of Seventy Thousand
Dollars ($70,000.00) in lieu of an equal amount of accrued and unpaid interest
due and payable on the Notes, and (d) as of the date hereof, the Lender hereby
agrees to accept from the Borrower in cash the sum of Four Thousand Seven
Hundred and Forty Two Dollars and Eighty Eight Cents ($4,742.88) for the balance
of the accrued and unpaid interest due and payable on the Notes. Upon receipt
and cancellation of the Notes, the Borrower hereby agrees to issue such Shares
and Debentures and to pay such cash to the Lender. The parties agree to execute
and deliver such further documents as may be necessary to give effect to the
conversion and cancellation of the Notes.
2. The
Borrower hereby represents and warrants to the Lender that (a) the Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware (b) the Borrower has all required corporate power and
authority to carry on its business as presently conducted, to enter into and
perform its obligations under this Agreement, (c) this Agreement constitutes the
legal, valid and binding obligation of the Borrower, enforceable against it in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors’ rights generally or by equitable principles,
and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, (d) the execution,
delivery and performance of this Agreement has been duly authorized by all
necessary corporate action of the Borrower. Except as set forth in
the preceding sentence, the Borrower makes no representation or warranty to the
Lender with respect to either the Shares or the Borrower.
4. The
Lender hereby represents and warrants to the Borrower that (a) the Lender holds
full right, title and interest to the Notes free of any liens or other
encumbrances, (b) the Lender has the legal capacity to enter into and to perform
his obligations under this Agreement and to carry out the transactions
contemplated hereby, (c) this Agreement constitutes the legal, valid and binding
obligation of the Lender, enforceable against the Lender in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally or by equitable principles, and (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (d) the Lender is acquiring
the Shares for the Lender’s own account and not with a view to their
distribution within the meaning of Section 2(11) of the U.S. Securities Act of
1933, as amended.
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts. Executed as of the date set forth
above.
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THE
BORROWER
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THE
LENDER
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Xxxx
X. Xxxxxxxxxxx
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By:
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Xxxxxxx
X. Xxxxxxxx
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Xxxx
X. Xxxxxxxxxxx
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Chief
Financial Officer
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