REDEMPTION AND CONVERSION AGREEMENT
EXHIBIT
10.9
This
Redemption and Conversion Agreement (this “Agreement”)
is
made as of January 17, 2007, by and among Solomon Technologies, Inc. (the
“Company”)
and
the holders of all of the outstanding Series C Preferred Stock of the Company
(the “Holders”).
WHEREAS,
by
letter dated December 5, 2006 to Integrated Power Systems LLC (“IPS”), acting as
the Sellers’ Representative (as defined in the Securities Purchase Agreement
dated August 17, 2006), and pursuant to Section 6(a) of the Certificate of
Designation of Series and Determination of Rights and Preferences of Series
C
Preferred Stock of the Company (the “Certificate
of Designation”),
the
Company notified IPS of its intent to redeem all of the 4,615,381 outstanding
shares of Series C Preferred Stock on or before December 15, 2006 at a per
share
price of $0.7258334 (an aggregate of $3,349,997.68 (the “Aggregate
Initial Redemption Price”));
and
WHEREAS,
by
letters dated December 14, 2006, IPS, on behalf of all the Holders, agreed
to
accept payment of $0.7258334 per share in redemption provided such payment
was
received by December 20, 2006, and tendered the Series C Preferred Stock share
certificates to the Company; and
WHEREAS,
by
written consent the Holders of at least 75% of the outstanding Series C
Preferred Stock, on behalf of all of the Holders, subsequently extended the
deadline for redemption to December 22, 2006; and
WHEREAS,
the
Company did not redeem the Series C Preferred Stock by December 22, 2006, and,
pursuant to Sections 6(b) and (c) of the Certificate of Designations, the
Holders are now entitled to receive a redemption price equal to $1.1375 per
share plus accrued dividends through the date of payment (the “Increased
Redemption Price”);
and
WHEREAS,
the
Holders acknowledge that although the Company is in the process of completing
a
financing transaction in which it intends to sell to private investors
approximately $5,500,000 of convertible debentures and warrants (the
“Financing”)
and by
which it will receive proceeds sufficient to enable the Company pay the
Aggregate Initial Redemption Price, the proceeds of the Financing will not
be
sufficient to enable the Company to pay the aggregate Increased Redemption
Price
and the Company is unwilling to engage in the Financing unless as a result
the
Company will be able to redeem and/or convert all of the Series C Preferred
Stock; and
WHEREAS,
the
parties hereto have agreed that immediately upon the closing of the Financing
the Company shall redeem, at the Increased Redemption Price and on a pro-rata
basis, that number of shares as may be redeemed with the Aggregate Initial
Redemption Price and that immediately upon such redemption the shares of Series
C Preferred Stock not so redeemed shall be converted into shares of common
stock, par value $0.001 per share, of the Company (“Common
Stock”)
on the
basis of one share of Common Stock for each such share of Series C Preferred
Stock.
NOW,
THEREFORE,
in
consideration of the mutual promises and covenants contained in this Agreement,
and other consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereby agree as follows:
1. Redemption.
Promptly following the closing of the Financing, the Company shall utilize
a
portion of the net proceeds thereof equal to the Aggregate Initial Redemption
Price to redeem, on a pro-rata basis, that number of whole shares of Series
C
Preferred Stock as may be redeemed with such net proceeds at the Increased
Redemption Price. The Company shall pay the Aggregate Initial Redemption Price
to the Holders by causing such funds to be deposited into the client funds
account of the Holders’ counsel (the “Deposit
Account”)
in
accordance with the following wire transfer instructions:
| Bank Name: |
Bank
of America
|
| 000 Xxxx 00xx Xxxxxx |
| Xxx Xxxx, Xxx Xxxx 00000 |
| ABA#: |
0000-0000-0
|
| Account Name: |
Pepe
& Hazard, LLP
|
| IOLTA Account-Boston Office |
| Account Number: |
941580677
|
2. Conversion.
Upon
deposit of the Aggregate Initial Redemption Payment in the Deposit Account
in
accordance with Section 1 hereof, the Company shall, and the Holders hereby
instruct the Company to, effect the conversion of each share of Series C
Preferred Stock that is not redeemed in accordance with Section 1 hereof into
one share of Common Stock.
3. Statement.
Upon
deposit of the Aggregate Initial Redemption Payment in the Deposit Account
in
accordance with Section 1 hereof, the Company shall (i) deliver to each Holder
a
written statement (the “Redemption
Statement”)
that
shall indicate (A) the number of shares of Series C Preferred Stock being
redeemed from each Holder, (B) the total number of shares of Common Stock
(“Conversion
Shares”)
to be
issued to each Holder, and (C) a detailed calculation of such numbers, (ii)
instruct its transfer agent to issue Conversion Shares to the Holders in the
amounts indicated on the Redemption Statement, and (iii) cancel the certificates
for the Series C Preferred Stock.
4. Distribution
of Redemption Payment and Conversion Shares.
The
Holders hereby agree that upon (a) deposit of the Aggregate Initial Redemption
Payment in the Deposit Account in accordance with Section 1 hereof, (b) delivery
of the Redemption Statement as set forth in Section 2 hereof, and (c) receipt
by
the Holders of the Conversion Shares, the Company shall be deemed to have duly
redeemed or converted all of the outstanding shares of Series C Preferred Stock
and the Company shall have no further liabilities or obligations to the Holders
in respect of the Series C Preferred Stock.
2
5. Release.
Effective upon (a) deposit of the Aggregate Initial Redemption Payment in the
Deposit Account in accordance with Section 1 hereof, (b) delivery of the
Redemption Statement as set forth in Section 2 hereof, and (c) receipt by the
Holders of the Conversion Shares, each of the Holders, on behalf of itself
and
its successors and assigns (collectively, the “Releasors”),
does
hereby forever release, discharge and acquit the Company, and each of its
subsidiaries, affiliates, officers, members, managers, agents and employees,
and
their respective successors, heirs, and assigns, and each of them (collectively
and severally, “Releasees”)
of and
from any and all of the following in respect to the Series C Preferred Stock:
claims, demands, obligations, liabilities, indebtednesses, breaches of contract,
breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance,
cause or causes of actions, debts, sums of money, accounts, compensations,
contracts, controversies, promises, damages, costs, attorneys’ fees, losses and
expenses, of every type, kind, nature, description or character, and
irrespective of how, why, or by reason of what facts, whether heretofore, now
existing or hereafter arising, or that could, might, or may be claimed to exist,
of whatever kind or name, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, each as though fully set forth herein at
length.
6. Notices.
Unless
otherwise expressly provided in this Agreement, all notices and other
communications provided for in this Agreement shall be in writing and shall
be
deemed delivered (a) when received, if delivered by hand delivery, (b) three
business days after being sent, certified or registered mail, return receipt
requested, first class postage prepaid, or (c) one business day after being
sent
by nationally recognized overnight courier, addressed (i) if to the Company,
to
it at 0000 X&X Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx, XX 00000, marked for
the attention of the Chief Executive Officer, with a copy (which shall not
constitute notice) to Xxxxx & Xxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, XX
00000, Attention: Xxxxx Xxxxxx, Esq., and (ii) if to a Holder, at its address
as
set forth on the books and records of the Company, with a copy (which shall
not
constitute notice ) to Pepe & Hazard LLP, 000 Xxxxxxxx Xxxxxx,
00xx
Xxxxx,
Xxxxxx, XX 00000-0000, Attention: Xxxxxxx X. Xxxxxx, Esq. All written notices
delivered by means other than as set forth above shall be deemed effective
upon
receipt. Any party may change the address to which notices, requests, consents
or other communications hereunder are to be delivered by giving the other
parties notice in the manner set forth in this Section 6.
7. Choice
of Law and Venue.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without giving effect to conflict of laws principles. In
the
event any action, suit or proceeding is instituted as a result of any matter
or
thing affecting this Agreement, the parties hereto hereby designate New York
County, New York as the proper jurisdiction and the venue in which same is
to be
instituted.
8. Miscellaneous.
This
Agreement shall be binding upon the Company, the Holders and their respective
successors and permitted assigns. This Agreement may be altered or amended
only
in writing signed by the Company and Holders who hold, or held prior to the
redemption and conversion described herein, at least 50% of the shares of Series
C Preferred Stock outstanding on the date hereof. If any provision of this
Agreement or the application thereof to any person or circumstance shall be
determined to be invalid or unenforceable, the remaining provisions of this
Agreement or the application of such provision to persons or circumstances
other
than those to which it is held invalid or unenforceable shall not be affected
thereby and shall be valid and enforceable to the fullest extent permitted
by
law. This Agreement may be executed in several counterparts or by separate
instruments, and all of such counterparts and instruments shall constitute
one
agreement, binding on all of the parties hereto. Facsimile signatures shall
be
deemed originals for all purposes hereunder.
(Remainder
of this page intentionally left blank. Signature page(s)
follow.)
3
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
|
SOLOMON
TECHNOLOGIES, INC.
|
||
| |
|
|
| By: | /s/ Xxxxx X. XxXxxxxxx, Xx. | |
|
Name: Xxxxx X. XxXxxxxxx, Xx. |
||
| Title: President | ||
4
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| POWER DESIGNS, INC. | ||
| |
|
|
| /s/ Xxxxxxx X. Xxxxxx, XX | ||
|
By: Xxxxxxx X. Xxxxxx, XX |
||
| Its: President | ||
5
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| INTEGRATED POWER SYSTEMS LLC | ||
| |
|
|
| /s/ Xxxxxxx Xxxxx | ||
|
By: Xxxxxxx Xxxxx |
||
| Its: President | ||
6
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| VANTAGE PARTNERS LLC | ||
| |
|
|
| /s/ Xxxxxxx X. Xxxxxx, XX | ||
|
By: Xxxxxxx X. Xxxxxx, XX |
||
| Its: President | ||
7
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxx Xxxxx
|
||
| Xxxxxxx Xxxxx | ||
8
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxx Xxxxxx
|
||
| Xxxxxxx Xxxxxx | ||
9
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxx Xxxxxxxxxx
|
||
| Xxxxxxx Xxxxxxxxxx | ||
10
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| WOODLAKEN LLC | ||
| |
|
|
|
/s/ Xxxx X. Xxxxxxxxx
By: Xxxx X. Xxxxxxxxx |
||
| Its: Manager | ||
11
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF, the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| BRIL CORPORATION PROFIT SHARING PLAN | ||
| |
|
|
|
/s/ Xxxx X. Xxxxxxxxx
By: Xxxx X. Xxxxxxxxx |
||
| Its: Manager | ||
12
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| JMC VENTURE PARTNERS LLC | ||
| |
|
|
|
/s/ Xxxxxxx X’Xxxxxx
By: Xxxxxxx X’Xxxxxx |
||
| Its: | ||
13
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF, the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| INTERNATIONAL CAPITAL PARTNERS LLC | ||
| |
|
|
|
/s/ Xxxxxxxx Xxxxx
By: Xxxxxxxx Xxxxx |
||
| Its: Manager | ||
14
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| ESTATE OF XXXXXX XXXXXXXXX | ||
| |
|
|
|
/s/ Xxxxxxxxxx X. Xxxxxxxxx
By: Xxxxxxxxxx X. Xxxxxxxxx |
||
| Its: Executor | ||
15
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| XXXXXXXX LLC | ||
| |
|
|
|
/s/ Xxxxxxx Xxxxxxxx
By: Xxxxxxx Xxxxxxxx |
||
| Its: Investment Advisor | ||
16
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx |
||
17
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF, the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxx XxXxx
Xxxxxxx XxXxx |
||
18
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx |
||
19
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxx X’Xxxxxx
Xxxxxxx X’Xxxxxx |
||
20
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
|
||
21
COUNTERPART
SIGNATURE
PAGE
TO
REDEMPTION AND
CONVERSION
AGREEMENT
IN
WITNESS WHEREOF,the
undersigned has executed this Agreement on the day and year first above
written.
|
HOLDER:
|
||
| |
|
|
|
/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx |
||
22
