Document:

ex10-1.htm

EXHIBIT 10.1

 

SETTLEMENT AGREEMENT

 

This Settlement Agreement (“Agreement”) is made and entered into by and between the United States of America, acting through the Commercial Litigation Branch of the United States Department of Justice and on behalf of the United States Department of Education (“United States”), Nelnet, Inc., a Nebraska corporation, Nelnet Education Loan Funding, Inc., a Nebraska corporation (together “Nelnet”), and Jon H. Oberg (“Oberg”) (all of which are referred to herein collectively as “the Parties”).

 

RECITALS

 

A.           An action entitled United States ex rel. Jon H. Oberg v. Nelnet, Inc. et al., now pending in the United States District Court for the Eastern District of Virginia, Case No. 1:07- cv-960-JFA, was filed by Oberg as Relator, pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730(b) (the “Civil Action”), on behalf of the United States.

 

B.           Oberg filed under seal a Complaint, and Amended Complaints thereafter, in the Civil Action (collectively, the “Oberg Complaint”), which was subsequently unsealed by the court.

 

C.           The United States will intervene in the Civil Action for the purposes of effecting this Settlement Agreement.

 

D.           The Oberg Complaint alleges False Claims Act violations involving Nelnet’s application for and receipt of certain special allowance payments from the Department of Education (“DOEd”).  That alleged conduct is referred to below as the Covered Conduct.

 

E.           On January 19, 2007, Nelnet and DOEd entered into a settlement agreement that released any claim DOEd might have for the recoupment of any special allowance payments from Nelnet claimed by Nelnet prior to that date.

 

 

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F.           This Agreement is made in compromise of disputed claims.  Neither this Agreement, its execution, nor the performance of any obligation under it, including any payment, nor the fact of the settlement, is intended to be, or shall be understood as an admission of facts or liability, or other expression reflecting upon the merits of the dispute, by Nelnet.  This Agreement is also not a concession by the United States or Oberg that their claims are not well-founded.  Nelnet expressly denies the allegations of the United States and Oberg as set forth herein and in the Civil Action and denies that it has engaged in any wrongful conduct in connection with the Covered Conduct.

 

G.           Oberg claims entitlement under 31 U.S.C. § 3730(d) to a share of the proceeds of this Settlement Agreement and to Oberg’s reasonable expenses, attorneys’ fees and costs.

 

H.          The Parties now mutually desire to reach a resolution of the Civil Action.

 

I.            The Parties mutually wish to avoid the expense, delay and inconvenience of litigation.

 

NOW, THEREFORE, for and in consideration of the mutual covenants, conditions and promises contained herein, the releases contained herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto agree as follows:

 

TERMS AND CONDITIONS

 

1.           Each and every term of this Settlement Agreement shall become null and void unless each of the following conditions is either satisfied by the date indicated or otherwise waived in writing by Nelnet:

 

	
  

	
a.

	
Approval of this Settlement Agreement by the United States of America on or before October 18, 2010;

 

 

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b.

	
Entry of an Order of Dismissal by the United States District Court for the Eastern District of Virginia;

 

	
  

	
c.

	
A stay of all proceedings in the Civil Action, including all motions currently pending, until the date of entry of an Order of Dismissal by the United States District Court for the Eastern District of Virginia; and

 

	
  

	
d.

	
Execution of a settlement agreement by each of SLM Corporation, Southwest Student Services Corporation, Brazos Higher Education Service Corporation, Brazos Higher Education Authority, Inc., and Student Loan Finance Corporation, with the United States and Oberg with respect to the Civil  Action by or before 12:00 p.m. Eastern time on October 22, 2010.

 

The date upon which each and every of the foregoing conditions has been satisfied, or otherwise waived in writing by Nelnet, shall be known as the “Trigger Date of this Agreement.”

 

2.           Within ten (10) days after the Trigger Date of this Agreement, Nelnet shall pay to the United States the sum of $47,000,000 (the “Settlement Amount”), by electronic funds transfer pursuant to written instructions to be provided by the Office of the United States Attorney for the Eastern District of Virginia.

 

3.           Conditioned upon the United States receiving the Settlement Amount from Nelnet and as soon as feasible after receipt, the United States shall pay a Relator’s share of the proceeds of this Settlement Amount to Oberg pursuant to 31 U.S.C. § 3730(d)(2), with the specific amount to be agreed upon by the United States and Oberg or determined promptly by the Court.

 

4.           Within ten (10) days after the Trigger Date of this Agreement, Nelnet shall pay to Oberg’s counsel, Wiley Rein LLP, the sum of $8,000,000 (the “Fee Amount”) by electronic funds transfer to the Wiley Rein LLP trust account pursuant to written instructions (including notice of the Fee Amount agreed upon) to be provided by Wiley Rein LLP in full payment of Relator’s claims for expenses, and attorney’s fees and costs.  Upon tendering the funds provided for in this paragraph, Nelnet shall have no further liability to Oberg or his attorneys for the payment of legal costs or attorney’s fees.

 

 

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5.           Subject to the exceptions in Paragraph 8 (concerning excluded claims) below, and conditioned upon Nelnet’s full payment of the Settlement Amount, the United States hereby releases Nelnet from, and promises to refrain from instituting, maintaining, or causing to be instituted or maintained, any civil action, claim, adjustment, set-off, or administrative monetary proceeding against Nelnet, its past, present or future officers, directors, employees, agents, parents, subsidiaries, affiliates, representatives, successors, or assigns, either in their corporate or personal capacities (the “Nelnet Releasees”), which the United States has or may have against the Nelnet Releasees under the False Claims Act, 31 U.S.C. §§ 3729 et seq., the Contract Disputes Act, 41 U.S.C. §§ 601 et seq., the Civil Anti-Kickback Act, 41 U.S.C. § 55, the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801 et seq., the Truth in Negotiations Act, 10 U.S.C. § 2304, 41 U.S.C. § 254b, and under any common law or equitable theories including fraud, breach of contract, unjust enrichment or payment by mistake for (a) Covered Conduct; and (b) conduct and claims by any Nelnet Releasee relating to special allowance payments received by any Nelnet Releasee prior to the date of this Agreement relating to the transferring or recycling of loans as described generally in the Civil Action.

 

6.           Subject to the exceptions in Paragraph 8 (concerning excluded claims) below, and conditioned upon Nelnet’s full payment of the Settlement Amount, DOEd hereby releases the Nelnet Releasees from, and promises to refrain from instituting, maintaining, or causing to be instituted or maintained, any civil action, claim, adjustment, set-off, or administrative proceeding of any kind against the Nelnet Releasees under the Higher Education Act, 20 U.S.C. § 1087-1(b) et seq., or its implementing regulations, 34 C.F.R. § 682.302 et seq. arising from the Covered Conduct and any other conduct and claims by any Nelnet Releasee relating to special allowance payments received by any Nelnet Releasee prior to the date of this Agreement relating to the transferring or recycling of loans as described generally in the Civil Action.  In addition, DOEd releases the Nelnet Releasees from any administrative claim, cause of action or proceeding arising under or relating to any suspension or debarment action under 48 C.F.R. Subpart 9.4 and 34 C.F.R. Part 85 arising from the Covered Conduct and any other conduct and claims by any Nelnet Releasee relating to special allowance payments received by any Nelnet Releasee prior to the date of this Agreement relating to the transferring or recycling of loans as described  generally in the Civil Action.

 

 

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7.           Subject to the exceptions in Paragraph 8 (concerning excluded claims) below, and conditioned upon Nelnet’s full payment of the Settlement Amount to the United States and the Fee Amount to Oberg’s counsel, Wiley Rein LLP, Oberg, for himself and for his heirs, successors, attorneys, agents, and assigns, hereby releases the Nelnet Releasees from, and promises to refrain from instituting, maintaining, or causing to be instituted or maintained, any civil action, claim, adjustment, set-off, or other proceeding against the Nelnet Releasees for any and all claims, known or unknown, contemplated or not contemplated, under any federal or state cause of action with respect to (1) Covered Conduct; (2) conduct and claims by any Nelnet Releasee relating to special allowance payments received by any Nelnet Releasee prior to the date of this Agreement; (3) any other act or omission by Nelnet or the Nelnet Releasees that occurred, if at all, prior to the date of this Agreement; and (4) any claim for costs or attorney’s fees.

 

 

 

 

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8.           Notwithstanding the releases given in Paragraphs 5 through 7 of this Agreement, or any other term of this Agreement, the following claims of the United States are specifically reserved and are not released:

 

a.           Any liability arising under Title 26, U.S. Code (Internal Revenue Code);

 

b.           Any criminal liability;

 

c.           Any administrative liability, including the suspension and debarment rights of any federal agency, other than the debarment rights of the DOEd under 48 C.F.R. Subpart 9.4 and 34 C.F.R. Part 85, which are released pursuant to Paragraph 6;

 

d.           Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct;

 

e.           Any liability based upon obligations created by this Agreement;

 

9.           Oberg and his heirs, successors, attorneys, agents, and assigns shall not object to this Agreement but agree and confirm that this Agreement is fair, adequate, and reasonable under all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B).   Conditioned upon Oberg’s  receipt of the payment described in Paragraph 3, Oberg and his heirs, successors, attorneys, agents, and assigns fully and finally release, waive, and forever discharge the United States, its officers, agents, and employees, from any claims arising from the filing of the Civil Action or under 31 U.S.C. § 3730, and from any claims to a share of the proceeds of this Agreement and/or the Civil Action.

 

10.           Nelnet waives and shall not assert any defenses Nelnet may have to any criminal prosecution or administrative action for any offense under Title 26 of the United States Code relating to the Covered Conduct that may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action.  Nothing in this paragraph or any other provision of this Agreement constitutes an agreement by the United States concerning the characterization of the Settlement Amount for purposes of the Internal Revenue laws, Title 26 of the United States Code.

 

 

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11.           Nelnet fully and finally releases Oberg and the United States, and its agencies, employees, servants, and agents from any claims (including attorney’s fees, costs, and expenses of every kind and however denominated) that Nelnet has asserted, could have asserted, or may assert in the future against the United States, and its agencies, employees, servants, and agents, related to the Covered Conduct and the United States’ investigation and prosecution thereof.

 

12.           a.           Unallowable Costs Defined: All costs (as defined in the Federal  Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of Nelnet, and its present or former officers, directors, employees, shareholders, and agents in connection with:

 

	
  

	
(1)

	
the matters covered by this Agreement;

 

	
  

	
(2)

	
the United States’ audit(s) and civil investigation(s) of the matters covered by this Agreement;

 

	
  

	
(3)

	
Nelnet’s investigation, defense, and corrective actions undertaken in response to the United States’ audit(s) and civil investigation(s) in connection with the matters covered by this Agreement (including attorney’s fees);

 

	
  

	
(4)

	
the negotiation and performance of this Agreement;

 

	
  

	
(5)

	
the payment Nelnet makes to the United States pursuant to this Agreement and any payments that Nelnet may make to Oberg, including costs and attorney’s fees, are unallowable costs for government contracting purposes (hereinafter referred  to as Unallowable Costs).

 

b.           Future Treatment of Unallowable Costs: Unallowable Costs will be separately determined and accounted for by Nelnet, and Nelnet shall not charge such Unallowable Costs directly or indirectly to any contract with the United States.

 

 

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c.           Treatment of Unallowable Costs Previously Submitted for Payment: Within 90 days of the Trigger Date of this Agreement, Nelnet shall identify and repay by adjustment to future claims for payment or otherwise any Unallowable Costs included in payments previously sought by Nelnet or any of its subsidiaries or affiliates from the United States.  The United States, including the Department of Justice and/or the affected agencies, reserves its rights to audit, examine, or re-examine Nelnet’s books and records and to disagree with any calculations submitted by Nelnet or any of its subsidiaries or affiliates regarding any Unallowable Costs included in payments previously sought by Nelnet, or the effect of any such Unallowable Costs on the amount of such payments.

 

13.           Nelnet agrees to cooperate fully and truthfully with the United States’ investigation of individuals and entities not released in this Agreement.  Upon reasonable notice Nelnet shall encourage, and agrees not to impair, the cooperation of its directors, officers, and employees, and shall use its best efforts to make available, and encourage, the cooperation of former directors, officers, and employees for interviews and testimony, consistent with the rights and privileges of such individuals.  Nelnet further agrees to furnish to the United States, upon request, complete and unredacted copies of all non-privileged documents, reports, memoranda of interviews, and records in its possession, custody, or control concerning any investigation of the Covered Conduct that it has undertaken, or that has been performed by another on its behalf.  This paragraph shall take effect from and after the Trigger Date of this Agreement.

 

14.           Upon execution of this Agreement, the Parties shall promptly sign and file in the Civil Action a Joint Stipulation of Dismissal with prejudice of the Civil Action pursuant to Rule 41(a)(1).

 

15.           Each Party shall bear its own legal and other costs incurred in connection with the Civil Action, including the preparation and performance of this Agreement, except as provided for in Paragraph 4 of this Agreement or the Supplemental Settlement Agreement and Release executed contemporaneously with this Agreement.

 

 

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16.           Each Party and signatory to this Agreement represents that it freely and voluntarily enters in to this Agreement without any degree of duress or compulsion.

 

17.           This Agreement is governed by the laws of the United States.  The exclusive jurisdiction and venue for any dispute relating to this Agreement is the United States District Court for the Eastern District of Virginia.  For purposes of construing this Agreement, this Agreement shall be deemed to have been drafted by all Parties to this Agreement and shall not, therefore, be construed against any Party for that reason in any subsequent dispute.

 

18.           This Agreement constitutes the complete agreement between Nelnet and the United States.  This Agreement, together with the Supplemental Settlement Agreement and Release executed contemporaneously herewith, constitute the complete agreement between Nelnet and Oberg.  This Agreement may not be amended except by written consent of the Parties.

 

19.           This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same Agreement.

 

20.           This Agreement is binding on Nelnet’s successors, transferees, heirs, and assigns.

 

21.           This Agreement is binding on Oberg’ s successors, transferees, heirs, and assigns.

 

22.           All parties consent to the United States’ disclosure of this Agreement, and information about this Agreement, to the public.

 

23.           Bert W. Rein of the Wiley Rein law firm warrants that he is fully authorized to execute this agreement on behalf of Oberg, his client.

 

 

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24.           This Agreement is effective on the date of signature of the last signatory to the Agreement (the “Effective Date” of this Agreement).  Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Agreement.

 

 

 

 

 

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IN WITNESS WHEREOF, this Settlement Agreement has been executed by the Parties.

 

THE UNITED STATES OF AMERICA

 

By           /s/ JAY D. MAJORS                                                                

JAY D. MAJORS

Commercial Litigation Branch

United States Department of Justice

 

Date        10/22/10

NEIL H. MACBRIDE

 

By           /s/ GERARD MENE                                                                

GERARD MENE

Assistant U.S. Attorney

U.S. Attorney’s Office for the

Eastern District of Virginia

 

 

THE UNITED STATES DEPARTMENT OF EDUCATION

 

By           /s/ JAMES RUNCIE                                                                

JAMES RUNCIE

Deputy Chief Operating Officer

Federal Student Aid

U.S. Department of Education

 

Date        10-21-2010                                                      

 

SETTLEMENT AGREEMENT

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JON H. OBERG

 

By           /s/ JON H. OBERG                                                      

 

Date        October 21, 2010                                                      

 

BERT W. REIN

 

/s/ BERT W. REIN                                                      

 

Date        10/21/10                                                      

 

 

SETTLEMENT AGREEMENT

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NELNET, INC.

 

By           /s/ WILLIAM J. MUNN                                                      

 

Date        10-21-2010                                                                

 

NELNET EDUCATION LOAN FUNDING, INC.

 

By           /s/ WILLIAM J. MUNN                                                      

 

Date        10-21-2010                                                                

 

 

SETTLEMENT AGREEMENT

PAGE 13 OF 13ex10-197.htm

EXHIBIT 10.197

 

 

Dated    July 2010

 

 

 

CALYPTE BIOMEDICAL CORPORATION (1)

 

MARR TECHNOLOGIES B.V. (2)

 

MARR TECHNOLOGIES LIMITED (3)

 

and

 

MARR TECHNOLOGIES ASIA LIMITED (4)

 

 

 

DEBT AGREEMENT

 

 

  

  

  

 

	
THIS AGREEMENT is dated

	  	
July 2010 and is made BETWEEN:

 

	
(1)

	
CALYPTE BIOMEDICAL CORPORATION a Delaware corporation whose registered office is at 16290 SW Upper Boones Ferry Road, Portland, OR 97224, USA (“Calypte”);

 

	
(2)

	
MARR TECHNOLOGIES B.V. a company incorporated in the Netherlands whose registered office is at Strawinskylaan 1431, 1077 XX Amsterdam, The Netherlands (“MTBV”);

 

	
(3)

	
MARR TECHNOLOGIES LIMITED a company incorporated in Mauritius whose registered office is at 7th Floor New Caudan, Dias Pier, Caudan Waterfront, Port Louis, Mauritius  (“MTL”); and

 

	
(4)

	
MARR TECHNOLOGIES ASIA LIMITED a company incorporated in the Seychelles whose registered office is at Oliaji Trade Center, 1st Floor, Victoria, Mahe, Seychelles (“MTAL”)

 

each a “Party” and together the “Parties”.

 

WHEREAS:

 

	
A.

	
On 4 April 2005, Calypte and the investors who are parties thereto, including MTBV, entered into a purchase agreement (the “Purchase Agreement”), pursuant to which Calypte issued to such investors certain secured 8% convertible promissory notes. Calypte has issued to MTBV, pursuant to the Purchase Agreement, an initial note dated 4 April 2005 in a principal amount of $2,800,000 (the “Initial MTBV Note”) and subsequent notes as interest payments (the Initial MTBV Note and all subsequent notes, as amended by amendment agreements dated 21 March 2007, 3 July 2007 and 4 December 2007, being the “MTBV Notes”).

 

	
B.

	
On 4 April 2005, Calypte as borrower and MTBV as lender entered into a credit facility agreement, as amended by amendment agreements dated 23 November 2005, 22 February 2006, 26 July 2006, 22 December 2006, 6 February 2007, 21 March 2007 and 4 December 2007 (the “Credit Facility”) under which MTBV has lent Calypte money and Calypte has issued to MTBV various secured promissory notes (the “CF Notes”).

 

	
C.

	
Calypte and MTL are shareholders in Beijing Calypte Biomedical Technology Ltd., a company organised and existing in China (“Beijing Calypte”). Calypte is the holder of a 51% equity interest in Beijing Calypte and MTL is the holder of a 49% equity interest in Beijing Calypte.

 

	
D.

	
Calypte and MTAL are shareholders in Beijing Marr Biopharmaceutical Co. Ltd., a company organised and existing in China (“Beijing Marr”). Calypte is the holder of a 51% equity interest in Beijing Marr and MTAL is the holder of a 49% equity interest in Beijing Marr.

 

	
E.

	
MTBV, MTL and MTAL are Affiliates. MTBV is, subject to the satisfaction of certain conditions, willing to release Calypte from $­­­­­3,000,000 of its indebtedness to MTBV under the MTBV Notes and the CF Notes and to convert the balance of such indebtedness into shares of Calypte.

 

NOW IT IS HEREBY AGREED as follows:

 

  

1

  

 

	
1

	
Definitions and interpretation

 

	
1.1

	
In this Agreement:

 

“Affiliate” means in relation to a Party any of the following from time to time: its subsidiaries and any holding company or parent undertaking of that Party and all other subsidiaries of any holding company or parent undertaking of that Party;

 

“Aggregate Indebtedness” means the aggregate indebtedness at the relevant time of Calypte to MTBV  arising under the MTBV Notes and the CF Notes, including accrued interest;

 

“BC Shareholders Agreement” means the agreement dated as of 1 September 2005 between Calypte and MTAL relating to, among other things, the ownership and operation of Beijing Calypte;

 

“BM Shareholders Agreement” means the agreement dated as of 21 December 2005 between Calypte and MTAL relating to, among other things, the ownership and operation of Beijing Marr;

 

“Beijing Calypte” has the meaning given in the recitals to this Agreement;

 

“Beijing Marr” has the meaning given in the recitals to this Agreement;

 

 “Conversion Price” means the lesser of (a) $0.042 and (b) the lowest price per share at which SF Capital Partners Limited or Morningtown Limited has agreed to convert into Shares indebtedness of Calypte to them arising pursuant to the Purchase Agreement;

 

”Marr Group” means MTBV, MTL, and MTAL collectively and as to each of them;

 

“Shareholders Agreements” means the BC Shareholders Agreement and the BM Shareholders Agreement and “Shareholders Agreement” means either or the relevant one of them;

 

“Shares” means ordinary shares of Calypte par value $0.03 ranking in all respects pari passu with all shares of Calypte in issue; and

 

“$” or “Dollars” means the lawful currency for the time being of the United States of America.

 

	
1.2

	
In this Agreement any references to:

 

	
  

	
(a)

	
a clause or schedule is to a clause or schedule to this Agreement;

 

	
  

	
(b)

	
a document is to that document as amended, varied, supplemented or replaced from time to time;

 

	
  

	
(c)

	
a “person” include an individual, firm, unincorporated association or body corporate; and

 

	
  

	
(d)

	
a collective defined term shall refer to the collective set and, unless the facts, context, or sense of this Agreement clearly require otherwise, shall also extend to mean  “...and each of them”.

 

  

2

  

 

	
2

	
Debt release and conversion to shares

 

	
2.1

	
Subject to the terms and conditions of this Agreement, the debt release and conversion to Shares, if any, shall occur as follows:

 

	
2.1.1

	
At such time (if any) as all of the conditions set out in clause 2.2  have been satisfied to the satisfaction of MTBV (other than those, if any, which MTBV has expressly waived by signed written notice to Calypte) (the “Effective Time”), the following shall automatically be deemed to  occur: (a) MTBV forever releases Calypte from $3,000,000 of the Aggregate Indebtedness and from any and all formal or informal intercompany obligations and/or claims of the Marr Group  against Calypte with effect from the time of this release and MTBV hereby waives with effect from such time all of its rights to demand payment or make claims for of all or any of such obligations ;and (b) Calypte converts the balance of the Aggregate Indebtedness as of December 31, 2009, being $ 6,398,353.11, at the Conversion Price into  152,341,741 Shares.

 

	
2.1.2

	
Prior to the Effective Time, MTBV and Calypte shall exchange (a) any and all of the original MTBV Notes and of the original CF Notes, to be provided by MTBV to Calypte, for (b) a stock certificate of  152,341,741 Shares in the name of MTBV , to be provided by Calypte to MTBV;

 

	
2.1.3

	
In the event a lower price per share conversion rate than the Conversion Price is granted to either or both of SF Capital Partners Limited and Morningtown Limited for any indebtedness of Calypte to them arising pursuant to the Purchase Agreement, then the number of Shares to be issued under clause 2.1 shall be recalculated in accordance with the lowest such price per share conversion rate.

 

	
2.2

	
The conditions referred to in clause 2.1 are:

 

	
2.2.1

	
(i) MTL or (ii) MTAL or (iii) another Affiliate of MTBV nominated by MTBV or (iv) a third party  nominated by MTBV   (registration with the applicable registry being effective evidence of such nomination) has been registered with the applicable Chinese registry as the owner of Calypte’s 51% equity interest in Beijing Calypte; and

 

	
2.2.2

	
(i) MTL or (ii) MTAL or (iii) another Affiliate of MTBV nominated by MTBV or (iv) a third party nominated by MTBV (registration with the applicable registry being effective evidence of such nomination) has been registered with the applicable Chinese registry as the owner of Calypte’s 51% equity interest in Beijing Marr; and

 

	
2.2.3

	
Calypte has entered into an agreement in form and substance satisfactory to MTBV for the provision by Calypte to Beijing Marr of, among other things, the technology, training and know how, all designed to enable Beijing Marr to produce HIV test kits; and

 

	
2.2.4

	
Calypte has lawfully and validly (including without limitation in accordance with its constitutional documents) issued to MTBV a share certificate in MTBV’s name for 152,341,741 Shares (subject to any increase in such number as a result of the operation of clause 2.1.3); and

 

	
2.2.5

	
Calypte has ceased to be indebted to SF Capital Partners Limited, Morningtown Limited and any other persons holding secured promissory notes issued pursuant to the Purchase Agreement.

 

  

3

  

 

	
2.3

	
The Shares resulting from the conversion hereunder shall be deemed to be issued and be subject to all the terms of the form of Subscription Agreement between Calypte and MTBV that was used for the last purchase of Shares by MTBV,

 

	
2.4

	
If by the date falling 3 months after the date of this Agreement, the release of indebtedness under clause 2.1 has not occurred, this Agreement shall, unless the Parties otherwise agree, automatically terminate.

 

	
2.5

	
If at any time prior to the release of indebtedness under clause 2.1, either (a) SF Capital Partners Limited or Morningtown Limited or any other persons holding secured promissory notes issued pursuant to the Purchase Agreement demands payment of all or any of Calypte’s indebtedness to such person, or (b) Calypte enters into a bankruptcy procedure, including without limitation, Chapter 7 or Chapter 11 proceedings, then this Agreement shall automatically terminate.

 

	
3

	
Warranties and undertakings

 

	
3.1

	
Each Party warrants that, as at the date of this Agreement:

 

	
3.1.1

	
it has full power to enter into and perform its obligations under this Agreement and has taken all necessary action(s) to approve and authorise the transactions contemplated by this Agreement;

 

	
3.1.2

	
this Agreement constitutes its valid and binding obligations enforceable in accordance with the terms of this Agreement, subject to general principles of equity and laws affecting creditors' rights generally; and

 

	
3.1.3

	
all relevant consents (if any) to its entering into this Agreement have been obtained and neither the entering into nor the performance by it of its obligations under this Agreement will constitute or result in any breach of any contractual or legal restriction binding on itself or its assets or undertakings.

 

	
3.2

	
Calypte warrants that the only persons holding secured promissory notes issued pursuant to the Purchase Agreement are MTBV, SF Capital Partners Ltd and Morningtown Limited.

 

	
3.3

	
MTBV undertakes that it will after the release of indebtedness under clause 2.1 above, upon the request of Calypte and at Calypte’s cost, execute such documents as are necessary to release the security granted to it by Calypte in connection with the MTBV Notes and the CF Notes.

 

	
4

	
Miscellaneous

 

	
4.1

	
An agreement for the transfer of Calypte’s 51% equity interest in Beijing Calypte and/or Beijing Marr may provide for the payment by the transferee to Calypte of cash consideration for the transfer of such equity interest. If this provision exists, it is acknowledged and agreed by Calypte that it exists solely to enable completion of the transfer of the equity interest to occur as soon as possible. Calypte hereby unconditionally and irrevocably (i) waives all of its right to receive such consideration and (ii) releases the transferee from its obligation to pay all or any of such consideration (the release of Calypte’s indebtedness to MTBV being the true consideration for the transfer).

 

	
4.2

	
The Shareholders Agreements shall be terminated as of the Effective Time and:

 

  

4

  

 

	
4.2.1

	
the parties to the Shareholders Agreements shall have no further rights or obligations under the Shareholders Agreements;

 

	
4.2.2

	
no party to a Shareholders Agreement shall be entitled to bring any claim against the other party to such Shareholders Agreement by reference to such Shareholders Agreement and hereby irrevocably waives any right to bring any such claim; and

 

	
4.2.3

	
nothwithstanding the terms of the Shareholders Agreements, no provision of either Shareholders Agreement shall survive termination of such Shareholders Agreement.

 

	
4.3

	
It is acknowledged and agreed that if, after the Effective Time, Calypte enters into a bankruptcy procedure, including without limitation, Chapter 7 or Chapter 11 proceedings, and a court, trustee in bankruptcy, liquidator or similar officer (however called), successfully challenges the arrangements reflected in this Agreement, all of Calypte’s indebtedness to MTBV arising under the MTBV Notes and the Credit Facility shall be revived as if it had never been released and all of MTBV’s rights arising under the relevant agreements shall be revived as if there had been no interruption. In addition, to the extent possible under applicable law, MTBV’s status as a first secured creditor of Calypte as at the date of this Agreement shall be recognised.

 

	
5

	
Entire Agreement

 

This Agreement represents the entire agreement between the Parties in relation to the subject matter of this Agreement and supersedes any previous agreement whether written or oral between the Parties in relation to that subject matter.

 

	
6

	
Counterparts

 

This Agreement may be executed in any number of counterparts and by the parties on separate counterparts, each of which when so executed and delivered shall be an original, but all counterparts shall together constitute one and the same instrument.

 

	
7

	
Notices

 

Any notice or other document to be given under this Agreement shall be in writing and shall either be delivered personally or sent by a recognised courier company (such as FedEx or DHL)  to the registered office of the party to be served and shall be deemed duly served (a) in a case of a notice delivered personally, at the time of delivery, and (b) in the case of a notice sent by courier, five clear business days after the day of dispatch or, if earlier, the date of receipt.

 

	
8

	
Choice of Law

 

This Agreement shall be governed by and interpreted in accordance with the internal laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

 

  

5

  

 

IN WITNESS whereof this Agreement has been entered into the day and year first above written.

 

	
EXECUTED by

CALYPTE BIOMEDICAL CORPORATION

 

	  	
 

 

..........................

Authorised signatory

	  

	
EXECUTED by

MARR TECHNOLOGIES B.V.

 

	  	
 

 

........................

Authorised signatory

	  

	
EXECUTED by

MARR TECHNOLOGIES LIMITED

 

	  	
 

 

........................

Authorised signatory

	  

	
EXECUTED by

MARR TECHNOLOGIES ASIA LIMITED

	  	
 

 

........................

Authorised signatory

	  

 

 

6

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