Exhibit 4.2
Socrates Technologies Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000
(000) 000-0000
December 31, 1999
Dear Sir:
Pursuant to our recent discussions, this letter sets forth the
agreement between Socrates Technologies Corporation, a Delaware corporation,
(the "Company") and yourself concerning the conversion of the unpaid principal
and accrued interest thereon on your outstanding $300,000 loan to the Company.
By signing below, the Company and you agree to the following terms and
conditions.
For purposes of this letter agreement, the terms "he", "his", "him",
"you", "your" and yourself" refer to Mr. E. Xxxx Xxxxxxx, and the terms "party"
and "parties" shall refer, respectively, to an individual party to this letter
agreement or, collectively, to the parties to this letter agreement. The phrase
"Socrates Entities" shall mean the Company, its subsidiaries and their
respective officers, directors, employees and agents.
Explanatory Note: You have loaned the Company a total principal amount
of $300,000, the loan bearing simple interest at 9% (the "Loan"). The accrued
interest as of December 31, 1999 on the Loan is $7,8750.00 as of December 31,
2000. The Loan is evidenced by promissory note attached hereto as Appendix A.
The Company and you wish to resolve all claims that you have, had or may have
under the Loan against the Company and to do so in accordance with the following
terms and conditions:
7. The unpaid principal and accrued interest thereon shall be converted
to shares of Common Stock of the Company at a rate equal to the weighted average
closing bid price of the Company's Common Stock for the thirty (30) consecutive
trading day period ending December 31, 1999. Based on our estimation, this would
result in the issuance of 232,358 restricted shares of Company Common Stock (the
"Shares") to you. The Shares will be registered under the Securities Act of
1933, as amended, ("Act") as soon as the Company is able to file such a
registration statement with the Securities and Exchange Commission
("Commission") and as soon as the Commission declares such registration
statement to be effective. The Company will use its good faith, diligent efforts
to file said registration statement and to file such amendments or post
effective amendments thereto that the Commission may require as a condition to
it being declared effective under the Act. If the Company pursued such
registration in good faith and in a diligent manner. The Company will not be
liable to you for any failure on the part of the Commission to declare said
registration statement effective without amendment or without change of form
under the Act. The Company will bear the cost of filing said registration
statement and all amendments, post-effective amendments and exhibits thereto.
8. The issuance of the Shares will constitute a full accord and
satisfaction of all claims by you and your executors, legal representatives and
heirs under the Loan against the Company and/or any of its subsidiaries, and any
of their respective officers, directors, shareholders, employees or agents.
9. The effective date of this Agreement is December 31, 1999, provided,
however, that the parties agree, understand and acknowledge that this letter
agreement must be ratified by the disinterested directors of the Company before
it will be binding upon the Company.
10. Each party agrees to maintain the confidentiality of the other
party's confidential information, non-public and material information and trade
secrets (regardless of form, format or means of communication). By stamp,
legend, cover letter or memo, or oral statement made or applied at the time of
disclosure, a party may designate any data, information, materials or documents,
regardless of form, format or means of communication, as its "confidential
information", "trade secrets" or "non-public material information".
11. Xx. Xxxxxxx shall be solely responsible for and shall timely comply
with any and all reporting obligations under the Act, Securities and Exchange
Act of
1934, as amended, ("Exchange Act"), and any regulations and schedules and forms
promulgated under the Act or Exchange Act.
12. The parties understand and agree that this is a compromise and
settlement of claims and/or potential claims and that the furnishing of the
consideration as a settlement and general release of all such claims shall not
be deemed or construed as an admission of liability or responsibility at any
time for any purpose.
13. The parties acknowledge that any breach of the provisions or
covenants set forth herein will cause irreparable damage that would be incapable
of precise measurement and for which no adequate remedy would exist at law and
agrees that injunctive relief, in addition to all other remedies, shall be
available therefor. It is the intent and understanding of each party hereto that
if, in any action before any court or agency legally empowered to enforce this
letter agreement, any term, restriction, covenant, or promise is found to be
unreasonable or illegal or against public policy, and for that reason(s)
unenforceable, then such term, restriction, covenant, or promise shall be deemed
modified to the extent necessary to make it enforceable by such court or agency.
4.3 Notice. Any notice required or permitted to be given under this
letter agreement shall be sufficient if in writing, and if (i) sent by
registered or certified mail to the address set forth below (which may be
changed by notice to the other party), or (ii) hand delivered to the intended
party and written evidence thereof is obtained, and shall be deemed given on the
earlier to occur of receipt by the party for whom the notice is intended or
three (3) days after mailing by registered or certified mail as set forth above.
Notwithstanding the foregoing, no notice shall be deemed insufficient if (i) the
party for whom such notice is intended admits to its receipt, or (ii) receipt by
the party for whom such notice is intended is otherwise proven. Initial notice
address for each party is as follows:
(c) Socrates Technologies Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
(000) 000-0000, Facsimile: (000) 000-0000
(d) E. Xxxx Xxxxxxx
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9. Governing Law. This letter agreement shall be construed and
administered in accordance with the laws of the State of Delaware, exclusive of
its conflict of laws rules. The parties hereto agree and stipulate that this
Agreement shall be deemed to have bee. Any claim or cause of action arising out
of or connected with this Agreement shall be brought solely and exclusively in
either the U.S. District Court for the State of Delawae or the first state court
of record in State of Delaware, and the parties consent to submit to the
personal jurisdiction of such courts, and waive all objections to such
jurisdiction and venue.
5 Assignment: The rights and obligations of the parties under this letter
agreement may be assigned, and shall inure to the benefit, and shall be
binding upon, their respective successors and assigns.
6 Severability: In the event that any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable, the remaining provisions of this Agreement shall be
unimpaired, and shall continue in full force and effect.
7 Singular and plural, genders: The singular shall be substituted for the
plural, and any gender or the neuter for any other gender, as
appropriate.
7.1 Construction: This letter agreement shall be interpreted in
accordance with its plain meaning, and the rule that
ambiguities shall be construed against the drafter of the
document shall not apply in connection with the construction
or interpretation hereof. The parties expressly agree that the
principle of contract interpretation that ambiguities are
construed against the author Counterparts: This letter
aegreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument and
agreement.
7.2 Entire Agreement: This Agreement contains the entire
understanding of the parties with respect to the subject
matter hereof. All prior promises, understandings, or
agreements are merged herein. It may not be changed orally,
but only by an agreement in writing, signed by the party
against whom
enforcement of any waiver, change, modification, or discharge
is sought.
IN WITNESS WHEREOF, the parties have set their hands and seals on the
day and year first above written.
Socrates Technologies Corporation, a Delaware corporation
By: _________________________________________
Name/Title: ______________________________________
Date: _______________________ XXXX
Xxxxxx Xxxx Xxxxxxx
By: __________________________________________
Date: ____________________
