EXHIBIT
10.10.BD


 


DEBT
CONVERSION AGREEMENT


 


THIS DEBT
CONVERSION AGREEMENT (the “Agreement”) is made and entered into effective as of
the 9th day of September, 2003, by and between ANTHONY M. FRANK KEOGH PLAN UTA
CHARLES SCHWAB & CO., INC. (hereinafter referred to as “Buyer”) and
ELECTROPURE, INC., a California corporation and MICRO IMAGING TECHNOLOGY, a
Nevada corporation (hereinafter collectively referred to as “Electropure” or
the “Company”).


 


R
E C I T A L S


 


WHEREAS, Buyer loaned the Company One Hundred Thousand Dollars
($100,000) under the terms of that certain 8% Convertible Term Note dated
December 18, 2002 and One Hundred Thousand Dollars ($100,000) under the terms
of the 8% Convertible Term Noted dated January 8, 2003 (collectively, the “Term
Notes”), and


 


WHEREAS, Buyer wishes to convert the principal amount of such Term
Notes, for a total of Two Hundred Thousand Dollars ($200,000) into eight (8)
Units of a Private Placement Offering dated August 19, 2003 for securities of
Electropure, Inc. and its subsidiary, Micro Imaging Technology, each Unit
consisting of:


 


•      Twenty Five Thousand
(25,000) shares of Micro Imaging Technology (MIT) Common Stock, plus


 


•      Twelve Thousand Five
Hundred (12,500) warrants to purchase MIT common stock at $2.00/share
- exercisable commencing on October 1, 2003 and expiring on September 30, 2007,
plus


 


•      Twelve Thousand Five
Hundred (12,500) warrants to purchase Electropure, Inc. (ELTP) common stock
at $1.00/share - exercisable commencing on October 1, 2003 and expiring
on September 30, 2007.


 


NOW,
THEREFORE, in consideration of the foregoing and of the mutual obligations
herein contained, it is agreed as follows:


 


1.             CONVERSION


 


(a)           On
the date on which the Company executes a Subscription Agreement to be completed
and signed by the Buyer, Buyer hereby agrees to convert all of the $200,000.00
in principal loaned under the Term Notes into eight (8) Units of the
above-referenced Private Placement Offering, representing the following
securities (collectively, the “Shares”):


 


•      One Hundred Thousand
(100,000) shares of Micro Imaging Technology (MIT) Common Stock, plus


 


•      Fifty Thousand (50,000)
warrants to purchase MIT common stock at $2.00/share - exercisable
commencing on October 1, 2003 and expiring on September 30, 2007, plus


 


•      Fifty Thousand (50,000)
warrants to purchase Electropure, Inc. (ELTP) common stock at $1.00/share
- exercisable commencing on October 1, 2003 and expiring on September 30, 2007.


 

















 


(b)           The
Shares shall have the rights, preferences, privileges, restrictions and other
terms set forth in the Confidential Private Placement Memorandum dated August
19, 2003 provided to the Buyer.


 


2.             REPRESENTATIONS
AND WARRANTIES OF BUYER           Buyer
represents and warrants to the Company:


 


(a)           The Shares are being
acquired by Buyer for investment for an indefinite period, for Buyer’s own
account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and the Buyer has no present intention of
selling, granting participations in, or otherwise distributing the same except
as may be permitted by the Securities Act of 1933, as amended (the “Act”).


 


(b)           Buyer does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer, or grant participation to such person or to any third person, with
respect to the Shares.


 


(c)           That Buyer understands
that the Shares have not been registered under the Securities Act of 1933, as
amended (the “Act”), in reliance upon the exemptions from the registration
provisions of the Act contained in Section 4 (2) thereof, and any continued
reliance on such exemption is predicated on the representations of the Buyer
set forth herein.


 


(d)           Buyer understands that
the Shares must be held indefinitely unless the sale or other transfer thereof
is subsequently registered under the Act, as amended, or an exemption from such
registration is available.  Buyer
further understands that the Company is under no obligation to register the
Securities on its behalf or to assist him in complying with any exemption from
registration except as otherwise provided herein.


 


(e)           Buyer (i) has adequate
means of providing for his current needs and possible contingencies, (ii) has
no need for liquidity in this investment, (iii) is able to bear the substantial
economic risks of an investment in the Shares for an indefinite period, (iv) at
the present time, can afford a complete loss of such investment, and (v) does
not have an overall commitment to investments which are not readily marketable
that is disproportionate to Buyer’s net worth, and Buyer’s investment in the
Shares will not cause such overall commitment to become excessive.


 


(f)            Buyer is an
“accredited investor” (as defined in Regulation D promulgated under the
Act)  and the undersigned’s total
investment in the Shares does not exceed 10% of the Buyer’s net worth.


 


(g)           Buyer recognizes that
the Company has had only limited revenues to date and that the Shares as an
investment involve significant risks.


 


(h)           Buyer will not transfer
the Shares without registering them under applicable federal and state
securities laws unless the transfer is exempt from registration.  Buyer realizes that the Company may not
allow a transfer of Shares unless the transferee is also an “accredited
investor”.  Buyer understands that legends
will be placed on certificates representing the Shares, with respect to the
above restrictions on resale or other disposition of the Shares and that stop
transfer instructions have or will be placed with respect to the Shares so as
to restrict the assignment, resale or other disposition thereof.


 


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(i)            The Company will
direct its transfer agent to, or will itself, place such a stop transfer order
in its books respecting transfer of the Shares, and the certificate or
certificates representing the Shares will bear the following legend or a legend
substantially similar thereto:


 


“THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF:  (1) AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT, OR (2) AN OPINION
OF  COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.”


 


(j)            That Buyer understands
that Rule 144, promulgated by the Securities and Exchange Commission under the
Act, may not be currently available for sale of the Shares, and there is no
assurance that it will be available at any particular time in the future.  If and when Rule 144 is available for sale
of the Common Stock underlying the Shares, such sales in reliance upon Rule 144
may only be (i) in limited quantities after the Shares have been held for one
(1) year after being sold by the Company, or (ii) in unlimited quantities by
non-affiliates after the Shares have been held for two (2) years after being
sold by the Company, in each case in accordance with the conditions of the
Rule, all of which must be met (including the requirement, if applicable, that
adequate information concerning the Company is then available to the public).  The Company and Buyer acknowledges that the
Company has no obligation to supply the information required for sales
under Rule 144.


 


(k)           The Purchase Price to
be paid by Buyer to Company for the Shares has been determined by Buyer as fair
and appropriate based solely upon Buyer’s independent investigation and due
diligence of the Company, and neither Buyer nor the Company nor any of their
agents, including, without limitation, any of their officers, directors,
employees, accountants and attorneys, has made any representations or
warranties whatsoever in connection with the sale of the Shares by the Company
to Buyer.  Buyer has had sufficient
opportunity in connection with the sale of the Shares to review the Company’s
business and affairs (including, without limitation, the Company’s financial
statements and other information).  The
Buyer has had answered to his satisfaction any questions with respect to the
Company’s business and affairs.  Buyer
further has had the opportunity to obtain independent financial, legal,
accounting, business, tax and other appropriate advice with respect to the
transactions contemplated by this Agreement, and is not relying upon the
Company or any of its agents in any manner in connection with same.


 


3.             REPRESENTATIONS
AND WARRANTIES OF ELECTROPURE


 


(a)           Electropure is a
corporation duly organized and validly existing under the laws of the State of
California without limit as to duration of its existence, and is authorized and
in good standing to do business in no other state; Electropure has the
corporate power and adequate authority, rights and franchise to own its
property and to carry on its business as now conducted; and, subject to
ratification by its Board of Directors, Electropure has the corporate power and
adequate authority to enter into this Agreement.


 


(b)           The execution and
delivery of this Agreement and subject to (1) ratification by the Board of
Directors of the Company and (2) filing the Certificate with the California
Secretary of State, the performance of the provisions of this Agreement are not
in contravention of or in conflict with any law or regulation or any term or
provision of Electropure’s Articles of Incorporation or By-Laws and are duly
authorized and do not require the consent or approval of any governmental body
or other regulatory authority; and this Agreement is a valid, binding and legal
obligation of Electropure, enforceable in accordance with the terms herein.


 


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4.             ENTIRE AGREEMENT              This
Agreement embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings relating to such subject matter.


 


5.             AMENDMENT            This
Agreement may not be amended except by written document executed by the
parties.


 


6.             SUBJECT HEADINGS               Subject
headings are included for convenience only and shall not be deemed part of this
Agreement.


 


7.             SEVERABILITY            If any provision of this Agreement shall be
held unenforceable as applied to any circumstance, the remainder of this
Agreement and the application of such provision to other circumstances shall be
interpreted so as best to effect the intent of the parties.  The parties further agree to replace any
such unenforceable provision with an enforceable provision (and to take such
other action) which will achieve, to the extent possible, the purposes of the
unenforceable provision.


 


8.             GOVERNING LAW           This
Agreement shall be governed by and construed under the laws of the State of
California in force from time to time.


 


9.             PARTIES
BOUND            This Agreement is
binding on and shall inure to the benefit of the parties and their respective
successors, assign, heirs, and legal representatives.


 


10.          SURVIVAL             The
representations, warranties, covenants, and agreements contained in this
Agreement shall survive the consummation of the transactions contemplated
hereby.


 


11.          COUNTERPARTS            This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.


 


IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.


 


	
  COMPANY:

  	
   

  	
  BUYER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ELECTROPURE, INC.

  	
   

  	
  ANTHONY M. FRANK
  KEOGH PLAN

  UTA CHARLES SCHWAB & CO., INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /S/ 
  CATHERINE PATTERSON

  	
   

  	
  /S/ ANTHONY M. FRANK

  	
   

  
	
  Catherine Patterson, Chief Financial
  Officer

  	
   

  	
  Anthony M. Frank, Trustee

  	
   

  
	
  23456 South Pointe Drive

  	
   

  	
  101 Montgomery Street

  	
   

  
	
  Laguna Hills, CA 92653-1512

  	
   

  	
  San Francisco, CA   94104

  	
   

  



 


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