REDEMPTION AGREEMENT
EX-10.1
This
Redemption Agreement (“Agreement”) is made as of December 6, 2005 by and between
EnerTeck Corporation, a Delaware corporation (“EnerTeck”), on the one hand, and
Xxxxxxx X. Xxxxxxxxx (“Xxxxxxxxx”) and Xxxxxxx Xxxxx Partners, Inc., a Delaware
corporation (“Partners”), on the other hand.
Recitals
WHEREAS,
Xxxxxxxxx is a former officer and director of EnerTeck and its wholly-owned
subsidiary, EnerTeck Chemical Corp. (“EnerTeck Sub”);
WHEREAS,
Partners is a company owned and/or controlled by Xxxxxxxxx;
WHEREAS,
EnerTeck and Partners entered into a certain Consulting Agreement, dated January
9, 2003, as amended, whereby Partners agreed to provide certain consulting
services to EnerTeck (the “Consulting Agreement”);
WHEREAS,
on September 7, 2005, Xxxxxxxxx submitted his resignation as both an officer
and
director of EnerTeck and EnerTeck Sub;
WHEREAS,
in July 2005, EnerTeck issued to Xxxxxxxxx 1,000,000 shares (the “Xxxxxxxxx
Shares”) of EnerTeck’s Common Stock under EnerTeck’s 2005 Stock Compensation
Plan for services rendered and to be rendered;
WHEREAS,
prior thereto, for services rendered and to be rendered, EnerTeck issued certain
warrants to Partners to acquire shares of Common Stock of the
Company;
WHEREAS,
as a result thereof, Partners currently holds 1,270,000 warrants (the “Partners
Warrants”) to acquire an aggregate of 1,270,000 shares of Common Stock of the
Company;
WHEREAS,
Xxxxxxxxx and Partners have agreed to the redemption by EnerTeck of certain
of
the Xxxxxxxxx Shares and Partners Warrants, and EnerTeck is willing to redeem
those shares and warrants, on the terms and conditions set forth in this
Agreement.
Agreement
NOW,
THEREFORE, the parties hereto agree as follows:
1. Redemption
of Stock and Warrants.
Subject
to the terms and conditions of this Agreement, on the Closing Date (as
hereinafter defined), EnerTeck shall redeem from Xxxxxxxxx a total of Five
Hundred Thousand (500,000) of Xxxxxxxxx’x Shares and Five Hundred Thousand
(500,000) of the Partners Warrants, free of any liens, security interests or
adverse claims of any party. It is agreed that the balance of the Xxxxxxxxx
Shares (the “Earned Xxxxxxxxx Shares”) and Partners Warrants (the “Earned
Partners Warrants”) which are not being redeemed and cancelled as provided
herein are deemed fully earned by each of Xxxxxxxxx and Partners and EnerTeck
has no claim whether now or in the future with respect to Xxxxxxxxx’x ownership
and entitlement to the Earned Xxxxxxxxx Shares and Partners’ ownership and
entitlement to the Earned Partners Warrants. EnerTeck agrees to remove the
stop-transfer instructions in EnerTeck’s transfer records with respect to the
Earned Xxxxxxxxx Shares at such time that EnerTeck is legally permitted to
do so
in accordance with federal and state securities laws. Except as otherwise set
forth below, if at any time EnerTeck shall determine to file with the Securities
and Exchange Commission a registration statement relating to an offering for
its
own account or the account of others under the Securities Act of 1933, as
amended (the “Act”) of any of its equity securities (other than on Form S-4 or
Form S-8 or their then equivalents relating to equity securities to be issued
solely in connection with an acquisition of any entity or business or equity
securities issuable in connection with employee benefit plans), EnerTeck shall
send to Partners written notice of such determination and, if within fifteen
(15) days after the effective date of such notice, Partners shall so request
in
writing, EnerTeck shall include in such registration statement all or any part
of the shares of Common Stock underlying the Earned Partners Warrants (the
“Warrant Shares”) Partners requests to be registered. Notwithstanding the
foregoing, EnerTeck shall not be obligated to register the Partners Warrant
Shares if, in the opinion of counsel to EnerTeck, the public sale of the
Partners Warrant Shares may be effected without registration under the
Act.
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2. Consideration
and Payment Terms.
In
consideration for the redemption and cancellation of certain of the Xxxxxxxxx
Shares and Partners Warrants as herein provided, EnerTeck has (i) agreed to
make
certain payments and granted certain concessions to each of Xxxxxxxxx and
Partners as set forth herein, and (ii) has provided other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged
by
each of Xxxxxxxxx and Partners.
3. Closing.
The
closing in respect hereof shall take place on or before December 6, 2005 at
a
time and place as the parties shall agree (the “Closing Date”).
4. Closing
Documents.
On the
Closing Date, (i) Xxxxxxxxx shall deliver to EnerTeck five (5) stock
certificates in denominations of One Hundred Thousand (100,000) shares each
evidencing the Xxxxxxxxx Shares being redeemed hereunder and an Assignment
Separate From Certificate in the form attached hereto as Exhibit
A, or such other similar form acceptable to EnerTeck, signed
by
Xxxxxxxxx, and with the signature guaranteed by an eligible financial
institution or broker who is a member/participant in a Medallion Program
approved by the Securities Transfer Association, Inc. (“Eligible Medallion
Participant”), and (ii) Partners shall deliver to EnerTeck Warrant No. W15
evidencing Seven Hundred Sixty-Five Thousand (765,000) Partners Warrants and
an
Assignment Separate From Warrant in the form attached hereto as Exhibit
B
signed
by Partners, or such other similar form acceptable to EnerTeck, and with the
signature guaranteed by an Eligible Medallion Participant, which shall transfer
Five Hundred Thousand (500,000) of the Partners Warrants to EnerTeck. As soon
as
reasonably practicable following the Closing Date, EnerTeck shall cause to
be
delivered to Partners a replacement Warrant evidencing an aggregate Two Hundred
Sixty-Five Thousand (265,000) Partners Warrants representing the balance of
Warrant No. 15 not being redeemed as provided herein.
5. Repayment
of Loans.
EnerTeck hereby agrees that upon the raising of equity financing of at least
One
Million ($1,000,000) Dollars after the date hereof, EnerTeck will cause the
outstanding principal amounts of, and all accrued interest on, the following
loans to be repaid in full, subject to receipt by EnerTeck of the promissory
notes issued with respect thereto marked paid in full:
|
Lenders
|
Principal
Amounts
|
|
Xxxxxxx
Xxxxx Partners, Inc.
|
$30,990
|
|
Xxxxxxx
Xxxxxxx
|
$
7,000
|
|
Xxxxxxx
Xxxxxxxxx
|
$20,000
|
|
Xxxxxxx
Xxxxx
|
$10,000
|
|
Xxxxxxx
X. Xxxxxxxxx
|
$
3,000
|
Until
such time as the promissory notes shall have been paid in full, nothing in
this
Agreement shall be deemed to modify or amend any of the terms of the aforesaid
promissory notes.
6. Representations
and Warranties of EnerTeck.
EnerTeck
represents and warrants that (a) all corporate action on the part of
EnerTeck necessary for the authorization, execution, delivery and performance
of
this Agreement and the transactions contemplated hereby has been taken,
(b) no broker, finder or intermediary has been employed by EnerTeck
in
connection with this Agreement, and (c) this Agreement constitutes a valid
and
legally binding obligation of EnerTeck.
7. Representations
and Warranties of Xxxxxxxxx.
Xxxxxxxxx represents and warrants as follows:
7.1 Due
Authorization.
All
actions on the part of Xxxxxxxxx necessary for the authorization, execution,
delivery and performance of this Agreement and the transactions contemplated
hereby have been taken; no broker, finder or intermediary has been employed
by
Xxxxxxxxx in connection with this Agreement; and this Agreement constitutes
a
valid and legally binding obligation of Xxxxxxxxx.
7.2 Ownership.
Xxxxxxxxx owns the Xxxxxxxxx Shares being redeemed hereunder, has not
transferred or attempted to transfer any interest in the Xxxxxxxxx Shares being
redeemed hereunder to any person or entity, and has full power and authority
to
transfer and deliver the Xxxxxxxxx Shares being redeemed hereunder, and such
of
Xxxxxxxxx Shares being redeemed hereunder are free and clear of any and all
liens, encumbrances, charges, duties and assessments whatsoever.
8. Representations
and Warranties of Partners.
Partners
represents and warrants as follows:
8.1 Due
Authorization.
All
corporate action on the part of Partners necessary for the authorization,
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been taken; no broker, finder or intermediary has
been
employed by Partners in connection with this Agreement; and this Agreement
constitutes a valid and legally binding obligation of Partners.
8.2 Ownership.
Partners owns the Partners Warrants being redeemed hereunder, has not
transferred or attempted to transfer any interest in the Partners Warrants
being
redeemed hereunder to any person or entity, and has full power and authority
to
transfer and deliver the Partners Warrants being redeemed hereunder, and such
of
Partners Warrants being redeemed hereunder are free and clear of any and all
liens, encumbrances, charges, duties and assessments whatsoever.
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9. Miscellaneous
9.1 Amendment.
This
Agreement may be amended only by an instrument in writing signed by the party
against whom enforcement of any such amendment is sought.
9.2 Entire
Agreement.
This
Agreement contains the entire agreement and understanding of the parties with
respect to the entire subject matter hereof, and there are no representations,
inducements, promises or agreements, oral or otherwise, not embodied
herein.
9.3 Consulting
Agreement.
The
Consulting Agreement is hereby deemed terminated and cancelled with immediate
effect and neither EnerTeck nor Partners shall have any further liability or
obligation thereunder except for any provisions intended to survive termination
thereof.
9.4 Necessary
Performance.
Each
party to this Agreement shall perform any and all acts and execute and deliver
any and all documents as may be necessary and proper under the circumstances
in
order to accomplish the intents and purposes of this Agreement and to carry
out
its provisions.
9.5 Counsel.
Each of
the parties recognizes that members of the law firm of Danzig Xxxx Xxxxxx Xxxxx
& Xxx, LLP (the “Law Firm”), the draftsperson of this Agreement, has
rendered advice and counsel in the past to each of the parties hereto. Each
of
the parties acknowledges that the Law Firm has prepared the Agreement on behalf
of EnerTeck and is not representing any of the other parties in an individual
capacity and that each party further agrees that each has participated in the
preparation of the Agreement and has read and fully understands this Agreement.
Each of Xxxxxxxxx and Partners acknowledges that he/it has been advised to
consult with his/its own attorney regarding this Agreement and has done so
to
the extent that he/it deems appropriate. Each party hereto releases and
relinquishes any claim against the Law Firm or any of its members from any
conflict of interest arising or purportedly arising from this
Agreement.
9.6 Governing
Law.
This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Delaware without giving effect
to
principles of conflicts of law.
9.7 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same
instrument. This Agreement shall be effective upon delivery of an executed
counterpart via facsimile transmission by EnerTeck to Xxxxxxxxx and Partners
and
by Xxxxxxxxx and Partners to EnerTeck.
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IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.
ENERTECK
CORPORATION
By:
/s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Chief Executive Officer
/s/
Xxxxxxx X. Xxxxxxxxx
XXXXXXX
X. XXXXXXXXX
XXXXXXX
XXXXX PARTNERS, INC.
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
President
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