Exhibit 10.9
GENERAL RELEASE OF ALL CLAIMS
THIS GENERAL RELEASE OF ALL CLAIMS is entered into as of the 31st day
of July, 2003, by and among Pinetree Capital Corp., a corporation formed under
the laws of Ontario, ("Pinetree Parent") and Genevest, Inc., a corporation
formed under the laws of Ontario and a sister entity to Pinetree Parent
("Genevest") on the one hand, and Solomon Technologies, Inc., a Delaware
corporation ("Solomon") and Town Creek Industries, Inc., a Maryland corporation
and wholly owned subsidiary of Solomon Technologies, Inc., on the other hand.
WITNESSETH
WHEREAS, on January 8, 2001, Pinetree Parent and Solomon entered into a
Term Sheet whereby Pinetree Parent, through Pinetree (Barbados) Inc., a
corporation formed under the laws of Barbados and a wholly owned subsidiary of
Pinetree Parent ("Pinetree"), agreed to provide equity financing to Solomon
following a due diligence period (the "Term Sheet"); and
WHEREAS, pursuant to the Term Sheet, Pinetree issued that certain
Unsecured Convertible Promissory Note to Solomon, dated January 19, 2001,
(together with all amendments, modifications, addenda and supplements, the
"January 19 Note"), and Solomon was originally required to pay all monies due
and payable under the January 19 Note on January 18, 2002; and
WHEREAS, pursuant to the Term Sheet, Pinetree issued that certain
Unsecured Convertible Promissory Note to Solomon, dated June 18, 2001 (together
with all amendments, modifications, addenda and supplements, the "June 18
Note"), and Solomon was originally required to pay all monies due and payable
under the June 18 Note on January 18, 2002 (the June 18 Note and January 19 Note
shall be collectively referred to as the "Notes"); and
WHEREAS, on January 19, 2001, Solomon executed that certain Undertaking
and Agreement, requiring Solomon to make certain representations and warranties,
as well as satisfy certain future conditions and covenants, as further
consideration for the Notes (the "Undertaking and Agreement"); and
WHEREAS, on January 30, 2002, Pinetree and Solomon entered into that
certain Convertible Promissory Note Extension (the "Convertible Promissory Note
Extension"), extending the due date of the January 19 Note to March 31, 2002
(the "Maturity Date"); and
WHEREAS, on April 18, 2001, Genevest forwarded $35,000 to Solomon (the
"Genevest Monies") on behalf of Pinetree Parent, which was in need of
immediately available funds at the time, upon the condition that Genevest Monies
were being forwarded to Solomon under the terms and conditions of the Notes; and
WHEREAS, Solomon tendered a check to Pinetree Parent in repayment of
the Genevest Monies on August 29, 2001; and
WHEREAS, pursuant to the Notes, Solomon was required to repay Pinetree,
on or before the Maturity Date, the outstanding principal and interest, plus
accrued costs and fees (the "Obligations"); and
WHEREAS, as of the date of this Agreement, Solomon failed to repay all
monies due under the Notes; and
WHEREAS, Pinetree, on December 20, 2002, filed suit in the United
States District Court for the District of Maryland in a case styled Pinetree
(Barbados) Inc. x. Xxxxxxx Technologies, Inc., Civil Case No. 8:02-cv-04141,
seeking repayment of costs, interest and principal due under the Notes (the
"Lawsuit"); and
WHEREAS, Solomon has requested that Pinetree dismiss the Lawsuit and
waive any and all defaults, including monetary defaults, currently existing
under the Notes, and has also requested that Pinetree Parent release any and all
claims related to the Term Sheet or Undertaking and Agreement in return for
Solomon entering into a Memorandum of Understanding (the "MOU"), a Secured
Convertible Promissory Note, (the "Secured Note") and the Convertible Note
Security Agreement, (the "Security Agreement"), as well as TCI executing the MOU
and a Security Agreement, the form of which is attached hereto as Attachment 2.2
(the "TCI Security Agreement"), providing a security interest in all of TCI's
Collateral, as that term is defined in the TCI Security Agreement (the Secured
Note, Security Agreement and TCI Security Agreement, together with the MOU,
shall hereinafter be referred to as the "Settlement Documents", and the Secured
Note and Security Agreement, together with the MOU, shall hereinafter be
referred to as the "STI Settlement Documents"); and
WHEREAS, Solomon and TCI, as of the date of this Release, have executed
the Settlement Documents; and
WHEREAS, pursuant to Solomon and TCI executing each of the Settlement
Documents, Pinetree Parent and Genevest each are willing to enter into this
Release.
NOW THEREFORE, in consideration of the premises, and of the mutual
promises and undertakings of the parties, all as set forth herein, the adequacy
of which is hereby acknowledged and with the intention of being legally bound
hereby, the parties hereto agree as follows:
SECTION 1. Release
1.1 Release of Solomon and TCI. As a material inducement to
Solomon and TCI to enter into the Settlement Documents, Pinetree Parent and
Genevest (a) except for the obligations of Solomon and TCI expressly set forth
in the Settlement Documents and this Release, do hereby remise, release, acquit,
satisfy and forever discharge Solomon and TCI and all of their past, present and
future officers, directors, employees, agents, attorneys, representatives,
participants, heirs, successors and assigns, from any and all manner of debts,
accounting, bonds, warranties, representations, covenants, promises, contracts,
controversies, agreements, liabilities, obligations, expenses, damages,
judgments, executions, actions, claims, demands and causes of action of any
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nature whatsoever, whether at law or in equity, which Pinetree Parent or
Genevest have by reason of any matter, cause or thing, from the beginning of the
world to and including the date of this Release with respect to any matters,
transactions, occurrences, agreement, actions, or events arising out of, in
connection with or relating to any and all dealings, transactions, matters or
occurrences between Solomon on the one hand, and Pinetree Parent or Genevest or
their affiliates on the other hand, including but not limited to the Notes, Term
Sheet, Undertaking and Agreement and the Convertible Promissory Extension; and
(b) do hereby covenant and agree never to institute or cause to be instituted or
continue prosecution of any suit or other form of action or proceeding of any
kind or nature whatsoever against Solomon and TCI, or any of their past, present
or future officers, directors, employees, agents, attorneys, representatives,
participants, heirs, successors or assigns, by reason of or in connection with
any of the foregoing matters, claims or causes of action. Pinetree Parent and
Genevest each expressly acknowledge and agree that Solomon's and TCI's consent
to enter into this Release shall not be construed as an admission of wrongdoing,
liability or culpability on the part of Solomon or TCI or the existence of any
claims of Pinetree Parent or Genevest against Solomon or TCI.
1.2 Release of Pinetree Parent and Genevest. As a material
inducement to Pinetree executing the MOU and Pinetree Parent and Genevest
entering into this Release, Solomon and TCI (a) except for the obligations of
Pinetree in the Settlement Documents and Pinetree Parent and Genevest in this
Release, do hereby remise, release, acquit, satisfy and forever discharge
Pinetree Parent and Genevest and all of their past, present and future officers,
directors, employees, agents, attorneys, representatives, participants, heirs,
successors and assigns, from any and all manner of debts, accounting, bonds,
warranties, representations, covenants, promises, contracts, controversies,
agreements, liabilities, obligations, expenses, damages, judgments, executions,
actions, claims, demands and causes of action of any nature whatsoever, whether
at law or in equity, which Solomon or TCI have by reason of any matter, cause or
thing, from the beginning of the world to and including the date of this Release
with respect to any matters, transactions, occurrences, agreement, actions, or
events arising out of, in connection with or relating to any and all dealings,
transactions, matters or occurrences between Pinetree Parent and Genevest on the
one hand, and Solomon on the other hand, including but not limited to the Notes,
Term Sheet, Undertaking and Agreement and the Convertible Promissory Extension;
and (b) do hereby covenant and agree never to institute or cause to be
instituted or continue prosecution of any suit or other form of action or
proceeding of any kind or nature whatsoever against Pinetree Parent and
Genevest, or any of their past, present or future officers, directors,
employees, agents, attorneys, representatives, participants, heirs, successors
or assigns, by reason of or in connection with any of the foregoing matters,
claims or causes of action. Solomon and TCI each expressly acknowledge and agree
that Pinetree Parents' and Genevest's consent to enter into this Release shall
not be construed as an admission of wrongdoing, liability or culpability on the
part of Pinetree Parent or Genevest or the existence of any claims of Solomon or
TCI against Pinetree or Genevest.
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SECTION 2. Representations and Warranties
2.1 Pinetree Parent warrants and represents that:
a. Organization and Qualification. Pinetree Parent is a duly
organized and is a validly existing corporation under the laws of Ontario, with
full power and authority to own its properties and to transact its business as
now transacted. Pinetree Parent is qualified to transact business in each
jurisdiction where the ownership of its properties or the transaction of its
business requires such qualification.
b. Authorization. The execution and delivery by Pinetree
Parent of this Release (i) are and will be within its respective powers, (ii)
has been authorized by all necessary corporate action, and (iii) are not and
will not be in contravention of any order of court or other agency of
government, of law or of any indenture, agreement or undertaking to which
Pinetree Parent is a party or by which the property of Pinetree Parent is bound,
or be in conflict with, result in a material breach of or constitute (with due
notice and/or lapse of time) a material default under any such indenture,
agreement or undertaking, or result in the imposition of any lien, charge or
encumbrance of any nature on any of the properties of Pinetree Parent. An
original resolution or informal action of Pinetree Parent's Board of Directors
approving the execution and delivery of this Release, is attached hereto as
Attachment 2.1(b).
c. Valid, Binding and Enforceable. This Release will be valid,
binding and enforceable in accordance with its terms.
2.2 Genevest warrants and represents that:
a. Organization and Qualification. Genevest is a duly
organized and is a validly existing corporation under the laws of Ontario, with
full power and authority to own its properties and to transact its business as
now transacted. Genevest is qualified to transact business in each jurisdiction
where the ownership of its properties or the transaction of its business
requires such qualification.
b. Authorization. The execution and delivery by Genevest of
this Release (i) are and will be within its respective powers, (ii) has been
authorized by all necessary corporate action, and (iii) are not and will not be
in contravention of any order of court or other agency of government, of law or
of any indenture, agreement or undertaking to which Genevest is a party or by
which the property of Genevest is bound, or be in conflict with, result in a
material breach of or constitute (with due notice and/or lapse of time) a
material default under any such indenture, agreement or undertaking, or result
in the imposition of any lien, charge or encumbrance of any nature on any of the
properties of Genevest. An original resolution or informal action of Genevest's
Board of Directors approving the execution and delivery of this Release, is
attached hereto as Attachment 2.2(b).
c. Valid, Binding and Enforceable. This Release will be valid,
binding and enforceable in accordance with its terms.
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2.3 Solomon warrants and represents that:
a. Organization and Qualification. Solomon is a duly organized
and is a validly existing corporation under the laws of Delaware, with full
power and authority to own its properties and to transact its business as now
transacted. Solomon is qualified to transact business in each jurisdiction where
the ownership of its properties or the transaction of its business requires such
qualification.
b. Authorization. The execution and delivery by Solomon of
this Release (i) are and will be within its respective powers, (ii) has been
authorized by all necessary corporate action, and (iii) are not and will not be
in contravention of any order of court or other agency of government, of law or
of any indenture, agreement or undertaking to which Solomon is a party or by
which the property of Solomon is bound, or be in conflict with, result in a
material breach of or constitute (with due notice and/or lapse of time) a
material default under any such indenture, agreement or undertaking, or result
in the imposition of any lien, charge or encumbrance of any nature on any of the
properties of Solomon.
c. Valid, Binding and Enforceable. This Release will be valid,
binding and enforceable in accordance with its terms.
2.4 TCI warrants and represents that:
a. Organization and Qualification. TCI is a duly organized and
is a validly existing corporation under the laws of Maryland, with full power
and authority to own its properties and to transact its business as now
transacted. TCI is qualified to transact business in each jurisdiction where the
ownership of its properties or the transaction of its business requires such
qualification.
b. Authorization. The execution and delivery by TCI of this
Release (i) are and will be within its respective powers, (ii) has been
authorized by all necessary corporate action, and (iii) are not and will not be
in contravention of any order of court or other agency of government, of law or
of any indenture, agreement or undertaking to which TCI is a party or by which
the property of TCI is bound, or be in conflict with, result in a material
breach of or constitute (with due notice and/or lapse of time) a material
default under any such indenture, agreement or undertaking, or result in the
imposition of any lien, charge or encumbrance of any nature on any of the
properties of TCI.
c. Valid, Binding and Enforceable. This Release will be valid,
binding and enforceable in accordance with its terms.
SECTION 3. Miscellaneous
3.1 All capitalized terms used herein and not defined herein shall have
the meaning ascribed to such term in the Settlement Documents.
3.2 Governing Law; Exclusive Jurisdiction. This Release shall be
governed by the laws of the State of Maryland, without regard to the conflict of
laws provisions thereof. Solomon, TCI, Genevest and Pinetree Parent each
irrevocably consent to the exclusive
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jurisdiction of the State of Maryland and the United States District Court for
the District of Maryland, Northern Division, in any and all actions and
proceedings whether arising hereunder or under this Release or any of the
Settlement Documents.
3.3 Advice of Counsel. Each of the undersigned acknowledge that it has
consulted with independent legal counsel concerning this Agreement and knowingly
and voluntarily hereby waives the rights described therein or affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this General Release
of All Claims to be executed effective as of the day and year first written
above.
PINETREE CAPITAL CORP.
/s/ XXXXX XXXXXXXX
------------------
By: Xxxxx Xxxxxxxx
Title: Executive VP and CFO
GENEVEST, INC.
/s/ XXXXX XXXXXXXX
------------------
By: Xxxxx Xxxxxxxx
Title: CFO
SOLOMON TECHNOLOGIES, INC.
/s/ XXXXX X. TETHER
-------------------
By: Xxxxx X. Tether
Title: President and CEO
TOWN CREEK INDUSTRIES, INC.,
a wholly owned subsidiary of
Solomon Technologies, Inc.
/s/ XXXXX X. TETHER
-------------------
By: Xxxxx X. Tether
Title: President
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