Exhibit 4.5
MEMORANDUM OF AGREEMENT
AGREEMENT, dated as of December 31, 2000 (the "Effective Date"), between the
"Parties":
A. ENTERPRISES SOLUTIONS, INC. ("ESI").
B. WALTRAG A.G. ( "WALTRAG").
Antecedents:
On April 2, 2000, ESI executed a Deed Poll under the laws of
Switzerland (the "Deed Poll") in favor of the holders of $5,000,000
principal amount of 10% Convertible Notes due April 2, 2001, issued
pursuant to the Deed Poll (the "Notes"), WALTRAG being the initial
holder of the Notes, in exchange for the payment to ESI of $5,000,000,
the purchase price for the Notes. The Notes are convertible into Common
Stock, par value $.001 per share, of ESI ("Common Stock") at a
conversion price of 90% of the 22 day moving average price of the
Company's Common Stock, immediately prior to the conversion request. In
connection with the issuance of the Notes, WALTRAG was also issued an
additional Note (the "Additional Note") in the principal amount of
$250,000, having the same terms and conditions as the $5,000,000
principal amount of Notes issued under the Deed Poll and warrants to
purchase 550,000 shares of Common Stock of ESI on or before April 4,
2003, at an exercise price of $10.00 per share (the "Warrants").
The Parties wish to restructure the loan to ESI represented by the
Notes issued pursuant to the Deed Poll and the Additional Note and the
Warrants to convert into ESI Common Stock the Notes and the Additional
Notes, and all interest accrued thereunder to the Effective Date of
this Agreement; to restructure the Warrants; to provide for
representation on ESI's Board of Directors for a designee of WALTRAG;
and for the execution of Definitive Agreements (as defined below) to
evidence the agreements set forth herein.
NOW, THEREFORE, in furtherance of the antecedents, the Parties have
agreed upon the following matters:
I. Agreements of the Parties:
A. The Parties agree to restructure the loan evidenced by the
$5,000,000 principal amount of Notes issued under the Deed
Poll in the following manner:
o As of the Effective Date, the holder(s) of the entire
$5,000,000 principal amount of the Notes issued under the
Deed Poll shall convert said principal amount of Notes
into 1,635,000 shares of ESI Common Stock, and interest
accrued on
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the Notes through December 31, 2000, shall be converted
into an additional 120,000 shares of ESI Common Stock.
o No later than the tenth (10th) business day after the
Common Stock of ESI recommences trading on the OTC
Bulletin Board or on another recognized securities
exchange (the "Exercise Date"), clients of WALTRAG shall
exercise 600,000 additional warrants to purchase 600,000
shares of ESI Common Stock, at a purchase price of $1.00
per share. If the said 600,000 warrants are not exercised
on or prior to the Exercise Date, said warrants shall
expire, notwithstanding any terms to the contrary set
forth in the Warrant Agreement relating to the said
warrants. The warrants subject to this agreement shall be
designated in agreements executed at the closing of the
transactions under the Definitive Agreements, and the
holders thereof shall execute appropriate agreements at
the closing reflecting the terms agreed to in this
paragraph.
o The Additional Note and the Warrants shall be cancelled
in exchange for the issuance by ESI of 260,000 shares of
its Common Stock. Issuance of said shares of ESI Common
Stock shall represent payment for cancellation of the
Warrant and payment in full of the principal amount of
and all interest accrued through December 31, 2000 on the
Additional Note.
o Additional three-year warrants, expiring December 31,
2003, to purchase 320,000 shares of ESI Common Stock,
exercisable at a price of $1.00 per share, shall be
issued to WALTRAG's nominee or nominees at the closing of
these transactions under the Definitive Agreements, to
incentivize an expeditious closing thereof.
B. ESI agrees, effective with the execution of the Definitive
Agreements referred to below, to nominate WALTRAG's designee
to be an advisory member of ESI's Board of Directors, or
alternatively, as WALTRAG may specify, a non-director member
of a Planning and Operations Committee to be established by
ESI's Board of Directors for this purpose. As such advisory
or non-director committee member of ESI's Board of Directors,
WALTRAG's designee shall be provided with at least
forty-eight (48) hours notice of and an agenda for each and
every meeting of ESI's Board of Directors and of its Planning
and Operations Committee (if applicable), and shall have the
opportunity of participating in each such meeting, whether in
person or by conference telephone. ESI further agrees to
include WALTRAG's designee as a management nominee for ESI's
Board of Directors in ESI's proxy material to be filed with
the U.S. Securities and Exchange Commission in February or
March, 2001, and to vote, at ESI's Annual Meeting of
Stockholders to be held in May or June, 2001, all proxies
received by management in favor of such designee's election
as a director, unless specified to the contrary on the proxy.
C. The transactions agreed to herein shall be detailed in
appropriate definitive agreements and financing documents,
including any
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amendments to the Deed Poll required to reflect
the agreements set forth herein (the "Definitive
Agreements"). The Parties intend that the Definitive
Agreements shall be executed at a closing to take place as
soon as practicable following approval of the transactions
set forth herein by ESI Board of Directors. The Definitive
Agreements shall be effective as of the Effective Date set
forth above.
II. Dispute Resolution:
All disputes between the Parties arising from the interpretation of
this Agreement shall be settled in accordance with the procedures
applicable to disputes arising under the Deed Poll.
III. Confidentiality:
The Parties agree that all information exchanged in the course of the
discussions relative to the Agreement outlined herein shall be held as
confidential by the Parties, except as may be required to be disclosed
pursuant to the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
U.S. Securities and Exchange Commission promulgated thereunder.
IV. Notices:
All notices required or permitted to be given hereunder shall be valid
upon receipt if sent to the Party to whom the notice is addressed by
facsimile, and confirmed by registered post at its last known address.
IN WITNESS WHEREOF, the Parties hereto have signed this Memorandum of
Agreement, as of the date first set forth above.
ENTERPRISES SOLUTIONS, INC.
By: Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, President
and Chief Executive Officer
Signed for and on behalf of WALTRAG A.G.
by its duly authorized officer in the
presence of: WALTRAG A.G.
Yuhko Xxxxxxxx X. Xxxx
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Witness Title:
Yuhko Xxxxxxxx Xxxx Xxxxxxx
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