Exhibit 10.1

 

NOTE PURCHASE AGREEMENT

 

This Note Purchase Agreement (this “Agreement”), dated as of December ___, 2014,
is entered into by and among Pioneer Power Solutions, Inc., a Delaware
corporation (“Pioneer”), having an address at 400 Kelby Street, 9th Floor, Fort
Lee, NJ 07024, PTES Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Pioneer (“PTES”), having an address at 400 Kelby Street, 9th
Floor, Fort Lee, NJ 07024, and ___________________________, if an entity, a
____________ organized in ____________, or a natural person, having an address
at _______________________________________ (“Seller”).

 

RECITALS

 

WHEREAS, Titan Energy Worldwide, Inc., a Nevada corporation (the “Company”),
having an address at 6321 Bury Drive, Suite 8, Eden Prairie, MN 55346, is
indebted to Seller, pursuant to the terms and conditions of that certain note,
executed by the Company on the date set forth in the signature page hereto and
payable to the order of Seller in the original principal amount set forth in the
signature page hereto, plus accrued and unpaid interest (the “Note”) [and has
issued to Seller that certain warrant to purchase up to the number of shares of
common stock of the Company set forth in the signature page hereto (the
“Warrant”)]; and

 

WHEREAS, in connection with PTES’s acquisition of control of the Company, PTES
is soliciting to purchase all outstanding convertible and non-convertible notes
of the Company and warrants accompanying such notes for maximum aggregate
consideration of up to $2,892,700 (the “Maximum Note Purchase Amount”); and

 

WHEREAS, PTES has delivered to all holders of outstanding convertible and
non-convertible notes and warrants of the Company (the “Noteholders”) a circular
setting forth the terms and conditions of the proposal to purchase the notes and
warrants of the Company, dated as of December 5, 2014 (as may be amended or
supplemented from time to time, the “Circular”), which expires at 10 a.m., New
York Time, December 15, 2014 (the “Expiration Date”); and

 

WHEREAS, Seller wishes to sell, assign and transfer to PTES, and PTES wishes to
purchase from Seller, the Note [and the Warrant] and all right, title, and
interest related thereto; and

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, it is agreed as follows:

 

1.            Sale and Purchase. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell, assign and transfer to PTES, and PTES
hereby agrees to purchase and accept, the Transferred Rights (as defined
herein). “Transferred Rights” means all right, title, and interest in, to and
under the Note [and the Warrant] and, to the extent related thereto, the
following: (a) all amounts payable and rights available to Seller (if any) under
the Note [and the Warrant] and all obligations owed to Seller by the Company in
connection with the Note [and the Warrant] (if any) (b) all claims (including
contract claims, tort claims, and claims under any law governing the purchase
and sale of securities), suits, causes of action, and any other right of Seller
whether known or unknown, against the Company or any other person that in any
way is based upon, arises out of or is related to any of the foregoing; and
(iii) all proceeds to the foregoing.

 

 

 

 

2.           Purchase Price. The aggregate purchase price (the “Purchase Price”)
for the Note [and the Warrant] is determined and payable as follows: at Seller’s
election, to be indicated on the signature page hereto, either (A) 80% of the
original principal amount of the Note in cash (the “Cash Option”), or (B) 100%
to 110% of the original principal amount of the Note (as further described
below), of which 50% will be payable in cash and 50% will be payable in shares
of common stock of Pioneer, par value $0.001 per share (the “Pioneer Stock”),
valued at the volume-weighted average trading price per share of the Pioneer
Stock on the Nasdaq Capital Market and similar exchanges during the 15
consecutive trading-day period ending on December 12, 2014 (the “Combination
Option”). Notwithstanding the foregoing, if, as a result of Noteholders electing
to receive the Combination Option, the aggregate consideration payable to all of
the Noteholders accepting the proposal exceeds the Maximum Note Purchase Amount
less the aggregate principal amount of Notes represented by non-accepting
Noteholders (such excess, the “Excess Consideration”), then Seller acknowledges
and agrees that the Purchase Price payable to each such Noteholder electing to
receive the Combination Option (including, for the avoidance of doubt, Seller
if, and to the extent, Seller has elected to receive the Combination Option)
shall be reduced by such Noteholder’s pro rata portion (based on the relative
outstanding principal amount of tendered notes held by Noteholders electing to
receive the Combination Option) of the Excess Consideration. Such reduction in
the Purchase Price from 110% of the original principal amount of the Note shall
be apportioned equally between the cash and Pioneer Stock portions of the
Combination Option.

 

3.            The Closing.

 

A.                 The closing of the transactions contemplated hereby (the
“Closing”) shall take place by electronic communication not later than two (2)
business days after the Expiration Date or at such time as the parties hereto
mutually agree, but in no event later than 30 days after the Expiration Date (as
such date may be extended pursuant to the provisio to this sentence, the “Long
Stop Date”), provided that all of the conditions set forth in paragraph 6 hereof
and applicable to the Closing shall have been fulfilled or waived in accordance
herewith; provided further, however, that the parties hereto may mutually agree
to extend the Long Stop Date by not more than 30 days. At any time after the
Long Stop Date this Agreement may be terminated by PTES or Pioneer by delivering
written notice of termination to the other parties hereto. Upon any such
termination, no party hereto shall have any further obligation or liability to
the other parties hereto.

 

B.                 Concurrently with the execution of this Agreement, Seller
shall deliver to PTES original Note [and the Warrant] to be held by PTES pending
the Closing. To the extent that PTES and Pioneer terminate this Agreement
pursuant to paragraph 3.A. or the transactions contemplated hereby fail to
consummate, PTES shall promptly return the tendered Note [and Warrant] to
Seller.

 

C.                 At Closing, PTES shall deliver the cash portion of the
Purchase Price by wire transfer to the account identified by Seller in the
signature page hereto, and, if Seller has elected the Combination Option, in
addition to the cash portion of the Purchase Price to be delivered by PTES by
wire transfer, Pioneer shall deliver a stock certificate representing the
Pioneer Stock payable to Seller to the address of Seller set forth in the
signature page hereto.

 

4.             Representations and Warranties of Seller. Seller hereby
represents and warrants to PTES and Pioneer as follows:

 

A.                 Seller is the sole beneficial and record owner of all of the
Transferred Rights and Seller owns the Transferred Rights, free of any claim,
lien, security interest or encumbrance of any nature or kind and, as such, has
the exclusive right and full power to sell, transfer and assign the Transferred
Rights free of any such claim, lien, security interest or encumbrance. Seller
has not entered into any option or other agreement regarding the sale of the
Note [or the Warrant] other than this Agreement.

 

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B.                 Seller (i), if an entity, is duly organized and validly
existing under the laws of its jurisdiction of organization or incorporation,
(ii), if an entity, is in good standing under such laws and (iii) has all
requisite power, legal capacity and authority to enter into this Agreement and
perform its obligations hereunder.

 

C.                 This Agreement, when duly executed and delivered by Seller,
will constitute a legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by the
principles governing the availability of equitable remedies.

 

D.                 The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Seller will not
result in any violation of any agreement, instrument, judgment, order, writ,
decree or contract, statute, rule or regulation to which Seller is subject, or
constitute, with or without the passage of time and giving of notice, an event
that results in the creation of any lien, charge or encumbrance upon any of the
Transferred Rights.

 

E.                 The principal amount of the Note [and the number of common
stock of the Company issuable upon exercise of the Warrant] as of the date of
this Agreement is accurately stated in the signature page hereto, and there is
no funding obligation of any kind (whether fixed, contingent, conditional, or
otherwise) in respect of the Transferred Rights or all obligations and
liabilities of Seller with respect to, or in connection with, the Transferred
Rights that Seller, PTES or Pioneer is or shall be required to pay or otherwise
perform that Seller has not paid or otherwise performed in full.

 

F.                   No insolvency proceedings of any character, including
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, designating Seller as the
bankrupt or the insolvent, are pending or, to the knowledge of Seller,
threatened and Seller has not made an assignment for the benefit of creditors,
nor has Seller taken any action with a view to, or which would constitute the
basis for, the institution of any such insolvency proceedings.

 

G.                   Seller has complied with, and has performed, all
obligations required to be complied with or performed by it under the Note [or
the Warrant] (if any), and Seller has not breached any of its representations,
warranties, obligations, agreements or covenants under the Note [or the
Warrant]. Seller has not entered into any amendment or modification of the Note
[or the Warrant] with the Company or granted any waiver of any of the Company’s
obligations under the Note [or the Warrant], except for such amendments,
modifications, and waivers disclosed to PTES prior to the date of this
Agreement.

 

H.                   Seller (i) is a sophisticated entity with respect to the
sale of the Transferred Rights, (ii) has adequate information concerning the
business and financial condition of PTES to make an informed decision regarding
the sale of the Transferred Rights and (iii) has independently and without
reliance upon PTES or Pioneer, and based on such information as Seller has
deemed appropriate, made its own analysis and decision to enter into this
Agreement, except that Seller has relied upon PTES’s and Pioneer’s express
representations, warranties, covenants, agreements and indemnities in this
Agreement. Seller acknowledges that neither PTES nor Pioneer has given Seller
any investment advice or opinion on whether the sale of the Transferred Rights
is prudent.

 

I.                   Seller has not engaged in any acts or conduct or made any
omissions (including by virtue of Seller’s holding any funds or property of, or
owing amounts or property to, the Company, that will result in PTES’s receiving
proportionately less in payments or distributions under, or less favorable
treatment (including the timing of payments or distributions) for, the
Transferred Rights than is received by other Noteholders of the same kind, class
or type as the Note [or the Warrant].

 

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J.                   Seller acknowledges that any Pioneer Stock it is acquiring
pursuant to this Agreement (if any) has not been registered under the Securities
Act of 1933, as amended (the “Securities Act”), and the certificates evidencing
such Pioneer Stock will contain a restrictive legend. Seller acknowledges that
such Pioneer Stock may not be resold except pursuant to registration under the
Securities Act or an exemption therefrom.

 

K.                 Seller acknowledges that the Pioneer Stock it is acquiring
pursuant to this Agreement (if any) were not offered to Seller by means of any
form of general or public solicitation or general advertising, or publicly
disseminated advertisements or sales literature, including (a) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio or
(b) any seminar or meeting to which Seller was invited by any of the foregoing
means of communications.

 

L.                  Seller (i) is a sophisticated entity with respect to the
acquisition of the Pioneer Stock (if any), (ii) has adequate information
concerning the business and financial condition of Pioneer to make an informed
decision regarding the acquisition of the Pioneer Stock (if any) and (iii) has
independently and without reliance upon Pioneer, and based on such information
as Seller has deemed appropriate, made its own analysis and decision to enter
into this Agreement, except that Seller has relied upon Pioneer’s express
representations, warranties, covenants, agreements and indemnities in this
Agreement. Seller acknowledges that Pioneer has not given Seller any investment
advice or opinion on whether the acquisition of the Pioneer Stock is prudent.
Seller is acquiring the Pioneer Stock (if any) for its own account for the
purpose of investment and not with a view to, or for sale in connection with,
the distribution thereof. Seller is an “accredited investor” within the meaning
of Rule 501 of Regulation D promulgated under the Securities Act, as such rule
is presently in effect.

 

4.            Representations and Warranties of PTES and Pioneer. Each of PTES
and Pioneer, severally and not jointly, hereby represents and warrants to Seller
as follows:

 

A.                 Each of PTES and Pioneer (i) is duly organized and validly
existing under the laws of its jurisdiction of organization or incorporation,
(ii) is in good standing under such laws and (iii) has all requisite power,
legal capacity and authority to enter into this Agreement and perform its
obligations hereunder.

 

B.                 This Agreement, when duly executed and delivered by each of
PTES and Pioneer, will constitute a legal, valid and binding obligation of PTES
and Pioneer, respectively, enforceable against each of PTES and Pioneer in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by the principles
governing the availability of equitable remedies.

 

C.                 No action, approval, consent or authorization, including, but
not limited to, any action, approval, consent or authorization by any
governmental or quasi-governmental agency, commission, board, bureau or
instrumentality is necessary or required as to it in order to constitute this
Agreement as a valid, binding and enforceable obligation of it in accordance
with its terms.

 

5.             Additional Representations and Warranties of Pioneer. Pioneer
hereby further represents and warrants to Seller that the shares of Pioneer
Stock being delivered to Seller hereunder, if any, are duly authorized, validly
issued, fully paid and non-assessable.

 

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6.             Closing Conditions.

 

A.                 Conditions Precedent to the Obligation of Seller. The
obligation hereunder of Seller is subject to the satisfaction or waiver, at or
before the Closing, of the conditions set forth below. These conditions are for
the sole benefit of Seller and may be waived by Seller at any time.

 

i.Accuracy of PTES’s and Pioneer’s Representations and Warranties. Each of the
representations and warranties of PTES and Pioneer shall be true and correct in
all respects as of the date when made and as of the date of the Closing as
though made at that time.

 

ii.No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

 

iii.Delivery of Purchase Price. The Purchase Price shall have been delivered to
Seller.

 

iv.Pioneer Stock Certificate. If any Pioneer Stock shall be issued to Seller as
a portion of the Purchase Price, Pioneer shall have delivered to Seller a stock
certificate for the Pioneer Stock being issued to Seller at Closing.

 

B.                 Conditions Precedent to the Obligation of PTES and Pioneer.
The obligation hereunder of each of PTES and Pioneer is subject to the
satisfaction or waiver, at or before the Closing, of each of the conditions set
forth below. These conditions are for PTES’s and Pioneer’s benefit only and may
be waived by them at any time. Any waiver of these closing conditions shall
require the affirmative written consent of both PTES and Pioneer.

 

i.Accuracy of Seller’s Representations and Warranties. Each of the
representations and warranties of Seller in this Agreement shall be true and
correct in all material respects as of the date when made and as of the date of
the Closing as though made at that time.

 

ii.Execution by Expiration Date. Completed and duly executed Agreement shall
have been received and accepted by PTES prior to the Expiration Date as set
forth in the Circular.

 

iii.Delivery of the Original Note [and the Warrant]. Concurrently with the
execution of this Agreement, Seller shall have delivered the original Note [and
the Warrant] to PTES in accordance with the Circular, and such original Note
[and the Warrant] shall have been received and accepted by PTES prior to the
Expiration Date.

 

iv.No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

 

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v.Minimum Condition. Noteholders representing more than 75% of the aggregate
amount of principal of outstanding convertible and non-convertible notes of PTES
shall have agreed to sell the notes to PTES pursuant to the terms and conditions
described in the Circular and shall have executed note purchase agreements;
provided, however, PTES shall reserve the right to purchase the tendered Note
[and Warrant] even if the condition described in this paragraph 6.B.v. is not
met.

 

7.            General Provisions.

 

A.                 Entire Agreement; Amendment and Waiver. Except as set forth
herein, each of Seller, PTES and Pioneer is not relying upon any representations
other than those specifically contained herein. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
contained herein and supersedes all prior oral or written agreements, if any,
among the parties hereto with respect to such subject matter and, except as
otherwise expressly provided herein, is not intended to confer upon any other
person any rights or remedies hereunder. Any amendments hereto or modifications
hereof must be made in writing and executed by each of the parties hereto. No
waiver of any provision of this Agreement shall be effective against a party
unless in a writing duly executed and delivered by such party. No waiver of any
particular provision of this Agreement shall constitute a waiver of any other
provision hereof. No waiver of any provision of this Agreement in respect of a
particular event or circumstance shall constitute a waiver of the same provision
in respect of any other event or circumstance. Any failure by the parties hereto
to enforce any rights hereunder shall not be deemed a waiver of such rights.

 

B.                 Indemnification. In the event Seller breaches any of its
representations, warranties, and/or covenants contained herein or in the event
any type of liability is or was created with regard to the Transferred Rights
arising prior to Closing, then Seller shall indemnify PTES and Pioneer from and
against the entirety of any losses, damages, amounts paid in settlement of any
claim or action, expenses, or fees including court costs and reasonable
attorneys' fees and expenses and the cost of enforcing this indemnification.

 

C.                 Fairness of the Purchase Price. Seller, PTES and Pioneer
hereby acknowledge, as evidenced by their signatures hereto, that the Purchase
Price is fair, equitable and valid.

 

D.                 Governing Law; Jurisdiction. 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. The parties consent to the
exclusive jurisdiction of the state and federal courts located in New York
County, New York, for any action, dispute, claim or proceeding arising out of
this Agreement or the transactions contemplated hereby.

 

E.                  Binding Effect; Assignment. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors and
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be transferred or assigned (by operation of law or otherwise) by
any of the parties hereto without the prior written consent of the other party
hereto. Any transfer or assignment of any of the rights, interests or
obligations hereunder in violation of the terms hereof shall be void and of no
force or effect.

 

F.                  Specific Performance. Seller recognizes and acknowledges
that a breach by Seller of any covenants or agreements contained in this
Agreement will cause PTES and Pioneer to sustain damages for which PTES and
Pioneer would not have an adequate remedy at law for money damages, and
therefore Seller agrees that in the event of any such breach, PTES and Pioneer
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which PTES and Pioneer may be entitled, at law or in equity and PTES
and Pioneer shall not be required to post a bond hereunder.

 

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G.                 Survival of Representations and Warranties. All
representations and warranties made by the parties to this Agreement shall
survive the Closing and shall not be affected by any investigation made prior to
the Closing.

 

H.                 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall be deemed to be an original,
and such counterparts shall together constitute but one and the same instrument
and shall bind all parties signing such counterpart.

 

I.                    Further Assurances. Following the Closing, each of Seller,
PTES and Pioneer shall execute and deliver such additional documents,
instruments, conveyances and assurances, and take such further actions as may be
reasonably required to carry out the provisions hereof and give effect to the
transactions contemplated by this Agreement.

 

J.                   Seller acknowledges and agrees that PTES and Pioneer may
make individual proposals to Noteholders on terms that are different than the
terms set forth in the Circular or this Agreement, including, without
limitation, with respect to purchase price (“Side Letters”); nothing herein or
in the Circular shall be deemed to restrict or prohibit Side Letters and neither
PTES nor Pioneer has any obligation to disclose or offer any Side Letters to
Seller. Seller acknowledges that it shall not have any claim against PTES or
Pioneer with respect to any Side Letters.

 

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first written above.

 

 

  PTES Acquisition Corp.               By:     Name: Andrew Minkow     Title:
Chief Financial Officer                     Pioneer Power Solutions, Inc.      
        By:     Name: Andrew Minkow     Title: Chief Financial Officer

  

Consented to and Accepted:

 

Titan Energy Worldwide, Inc.

 

 

By:___________________________

 Name: Andrew Minkow

 Title: Chief Financial Officer

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR SELLER FOLLOWS]

 

 

 

Signature Page to Note Purchase Agreement

 

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this Note Purchase Agreement to
be duly executed by their respective authorized signatories as of this ___ day
of ____________, _______.

 

Name of Seller:
______________________________________________________________________

 

Signature of Authorized Signatory of Seller:
_______________________________________________

 

Name and Title of Authorized Signatory (if Seller is an entity):
_________________________________

 

Email Address of Authorized
Signatory:__________________________________________________

 

Facsimile Number of Authorized Signatory:
_________________________________________________

 

Address for Notice to Seller:

 

 

 

 

Principal Amount of Note: $_________________

 

Note Issue Date: ___________________________

 

Number of Shares of Common Stock Issuable upon Exercise of the Warrant (if any):
__________________

 

Warrant Issue date: _________________________

 

 

Payment shall take the form of (check one applicable box):

 

o 80% of the original principal amount of the Note in cash (the “Cash Option”);
or

 

o100% to 110% of the original principal amount of the Note, of which 50% will be
payable in cash and 50% will be payable in shares of common stock of Pioneer,
par value $0.001 per share, valued at the 15-day volume-weighted average price
per share of the Pioneer Stock on the Nasdaq Capital Market and similar
exchanges ending on December 12, 2014 (the “Combination Option”)

 

 

Seller’s tax identification number or social security number: _________________

 

 

Address for Delivery of Pioneer Stock to Seller (if not same as address for
notice):

 

 

 

Seller Wire Instructions for Cash Payment: