Exhibit
10.67
AGREEMENT TO
EXCHANGE
SERIES I PREFERRED
STOCK
FOR SECURED CONVERTIBLE
NOTE
THIS AGREEMENT , dated as of December 28, 2005, is entered into
by and between STRATUS SERVICES GROUP, INC. , a
Delaware corporation, with headquarters located at 500 Craig Road,
Suite 201, Manalapan, New Jersey 07726 (the “Company”)
and Pinnacle Investment Partners, L.P., a New York limited
partnership, with an office at 30 Montgomery Street, Suite 220,
Jersey City, New Jersey 07032 (“Pinnacle”).
WITNESSETH:
WHEREAS, Pinnacle holds 21,531 shares of the
Company’s Series I Preferred Stock (“Series I Preferred
Stock”); and
WHEREAS , the Company owes Pinnacle certain penalties
monies in respect of such Series I Preferred Stock in the total
amount of $100,000.00;
WHEREAS , Pinnacle is willing to exchange the Series I
Preferred Stock for a secured convertible note, in the form
attached hereto, in the principal amount of $2,356,850 (the
“Secured Note”).
NOW,
THEREFORE, in
consideration for the foregoing, the parties hereto agree as
follows:
|
1.
|
Exchange
.
Pinnacle’s 21,531 shares of
Series I Preferred Stock, including all unpaid dividends and
penalties due thereunder, will be exchanged as of December 28, 2005
for the Secured Note. Thus, concurrently with the execution of this
Agreement, Pinnacle shall deliver to the Company the stock
certificates evidencing the Series I shares duly
endorsed
|
for transfer to the Company (or accompanied by a
stock power duly executed in blank) and the Company shall execute
and deliver to Pinnacle the Secured Note.
|
2.
|
Related Agreements
.
Concurrently with the execution of
this Agreement, the Company shall execute and deliver to Pinnacle a
Pledge and Security Agreement, UCC-1 financing statements and a
confession of judgment, all in the form attached hereto, to secure
the Company’s obligations under the Secured Note. Subject to
the parties entering into an separate agreement with regard to the
Series E Preferred providing for 35% of the exchanged value into
the secondary offering, the parties also shall exchange mutual
releases, in the form attached hereto, with respect to actions
preceding the date of this Agreement..
|
|
3.
|
Pinnacle’s Representations, Warranties,
Etc.; Access To Information; Independent
Investigation .
Pinnacle represents and warrants to, and covenants and agrees with,
the Company as follows:
|
|
|
a.
|
Pinnacle is
exchanging the Series I Preferred Stock and accrued dividends and
penalties thereon for the Secured Note for its own account for
investment only and not with a view towards the public sale or
distribution thereof and not with a view to or for sale in
connection with any distribution thereof.
|
|
|
b.
|
Pinnacle is (i)
an "accredited investor" as that term is defined in Rule 501 of the
General Rules and Regulations under the 1933 Act by reason of Rule
501(a)(3), and (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able,
by reason of the business and financial experience of its officers
(if an entity) and professional advisors (who are not affiliated
with or compensated in any way by the Company or any of its
affiliates or selling agents),
|
to protect its own interests in connection with
the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its
investment in the Secured Note.
|
|
c.
|
Pinnacle
understands that the Series I Preferred Stock, plus accrued
dividends and penalties are being exchanged for the Secured Note in
reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and Pinnacle's
compliance with, the representations, warranties, agreements,
acknowledgements and understandings of Pinnacle set forth herein in
order to determine the availability of such exemptions and the
eligibility of Pinnacle to acquire the Secured Note.
|
d. Pinnacle and its advisors, if any, have been
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the exchange of
the Series I Preferred Stock and the issuance of the Secured Note
which have been requested by Pinnacle. Pinnacle and its advisors,
if any, have been afforded the opportunity to ask questions of the
Company and have received complete and satisfactory answers to
any such inquiries;
|
|
e.
|
Pinnacle
understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Secured Note.
|
|
|
f.
|
This Agreement
has been duly and validly authorized, executed and delivered on
behalf of Pinnacle and is a valid and binding agreement of Pinnacle
enforceable in accordance with its terms, subject as to
enforceability to general principles of equity
|
and to bankruptcy, insolvency, moratorium and
other similar laws affecting the enforcement of creditors' rights
generally.
4.
Company Representations,
Etc . The
Company represents and warrants to Pinnacle that:
|
|
a.
|
Reporting
Company Status . The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign corporation to do business
and is in good standing in each jurisdiction where the nature of
the business conducted or property owned by it makes such
qualification necessary other than those jurisdictions in which the
failure to so qualify would not have a material and adverse effect
on the business, operations, properties, prospects or condition
(financial or otherwise) of the Company. The Company has registered
its common stock pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the Common Stock is
listed and traded on the OTC Bulletin Board Market.
|
|
|
b.
|
Authorized
Shares . The shares of common stock issuable upon
conversion of the Secured Note have been duly authorized and,
wh
|
|
