Document:

ex10x2.htm

Exhibit 10.2

 

 

PROMISSORY NOTE

 

	U.S. $1,125,000	 Issuance Date:   January 25, 2013

                                                                                                                                          

FOR VALUE RECEIVED, the undersigned PURE BIOSCIENCE, INC. a Delaware corporation (“Maker”), hereby promises to pay to the order of MORRISON & FOERSTER LLP (“Payee”) at 425 Market Street, San Francisco, CA , 94105, or at such other place or to such other party as Payee may from time to time designate, the principal sum of ONE MILLION ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS AND ZERO CENTS ($1,125,000.00), plus interest from the date hereof, in lawful money of the United States of America and in immediately available funds on the terms and subject to the conditions set forth below. This Note is issued by Maker to Payee in full satisfaction of certain invoices for services rendered by Payee on behalf of Maker through December 31, 2012.

 

1.  Maturity Date.  Unless sooner paid in accordance with the terms hereof, the entire unpaid principal amount and all accrued interest shall become fully due and payable on the earliest of (i) February 28, 2016, (ii) the consummation of a Change of Control (as defined below) or (iii) the acceleration of the maturity of this Note by the Payee upon the occurrence and during the continuance of an Event of Default (such earlier date, the “Maturity Date”).  The entire amount of unpaid principal and accrued but unpaid interest, if any, shall be due and payable on the Maturity Date. For purposes of this Note, “Change of Control” shall mean (A) the acquisition of Maker by another entity by means of any reorganization, merger or consolidation (but excluding any reorganization, merger or consolidation effected exclusively for the purpose of changing the domicile of Maker), (B) any transaction or series of related transactions in which Maker’s shareholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions (by virtue of securities issued in such transaction or series of related transactions) fail to hold at least 50% of the voting power of the resulting or surviving corporation following such transaction or series of related transactions, or (C) a sale of all or substantially all of the assets of Maker by means of a transaction or series of related transactions.

 

2.  Interest.  Interest on the outstanding balance of this Note shall be computed from the Issuance Date at the per annum rate of seven and one-half percent (7.5%) (computed on the basis of actual calendar days elapsed and a year of 365 days) or, if less, at the highest rate of interest then permitted under applicable law, and shall continue to accrue until paid in full; provided, however, upon the occurrence of an Event of Default (as defined in Section 5 below), the outstanding balance of this Note shall accrue interest at the per annum rate of ten percent (10%) (computed on the basis of actual calendar days elapsed and a year of 365 days) or, if less, at the highest rate permitted under applicable law, and shall continue to accrue until paid in full.  Accrued unpaid interest shall be due and payable at the times and at the interest rate as set forth herein until all principal and accrued interest owing on this Note shall have been fully paid and satisfied.

 

  

1

  

3.  Payment.

 

(a)           Form of Payment.  All payments of interest and principal shall be in lawful money of the United States of America to Payee by wire transfer.  All payments shall be applied first to accrued interest, and thereafter to principal.

 

(b)           Principal and Interest Payments.  Beginning on March 31, 2013, and on or before the last business day of each calendar month thereafter, Maker shall pay Payee all accrued but unpaid interest on the then unpaid amount of outstanding principal.  In addition, beginning on February 28, 2014, and on or before the last business day of each calendar month thereafter, Maker shall pay Payee equal principal installments of $46,875. If any amount of principal or interest remains unpaid as of January 31, 2016, such remaining amount shall be paid in full by the Maturity Date.

 

4.  Prepayment.  Maker reserves the right to prepay the outstanding balance under this Note in full or in part at any time during the term of this Note without notice and without premium or penalty.  If Maker prepays the entire amount of unpaid principal and accrued but unpaid interest prior to June 30, 2013, the balance of principal outstanding at the time of such prepayment shall be reduced by thirty-three percent (33%).  If Maker prepays the entire amount of unpaid principal and accrued but unpaid interest after June 30, 2013 but prior to September 30, 2013, the balance of principal outstanding at the time of such prepayment shall be reduced by twenty percent (20%).  If Maker prepays the entire amount of unpaid principal and accrued but unpaid interest after September 30, 2013 but prior to December 15, 2013, the balance of principal outstanding at the time of such prepayment shall be reduced by ten percent (10%).

 

5.  Events of Default; Remedies.  Any one of the following occurrences shall constitute an “Event of Default” under this Note:

 

(a)  Maker fails to make a payment of any installment of principal or interest on this Note when and as the same becomes due and payable in accordance with the terms hereof, whether upon the Maturity Date or upon any date upon which a monthly payment is due or by acceleration or otherwise;

 

(b)  Maker fails to perform any obligation under this Note;

 

(c)  Maker or any of its Subsidiaries shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or dissolution), (ii) suspend its operations other than in the ordinary course of business or (iii) take any action to authorize any of the actions or events set forth above in this Section 5(d);

 

(d)  Any judgments or arbitration awards shall be entered against Maker or any of its Subsidiaries, or Maker or any of its Subsidiaries shall enter into any settlement agreements with respect to any litigation or arbitration, in the amount of One Hundred Thousand Dollars ($100,000) or more, and such judgment, award or agreement has not been satisfied, vacated, discharged or stayed or bonded pending appeal within thirty (30) days after the entry thereof; or Maker or any of its subsidiaries shall be enjoined, restrained or in any way prevented by court order from continuing to conduct all or any material part of its business affairs;

 

  

2

  

(e)  Maker becomes insolvent or bankrupt, commits any act of bankruptcy, generally fails to pay its debts as they become due, becomes the subject of any proceedings or action of any regulatory agency or any court relating to insolvency, or makes an assignment for the benefit of its creditors, or enters into any agreement for the composition, extension, or readjustment of all or substantially all of his obligations;

 

(f)  The holder of any indebtedness of Maker accelerates any payment of any amount or amounts of principal or interest on any such indebtedness (the “Indebtedness”) (other than with respect to this Note) prior to its stated maturity or payment date, the aggregate principal amount of which Indebtedness is in excess of $100,000, whether such Indebtedness now exists or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and owing and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within fifteen (15) business days of such acceleration.

 

6.  Consequences of Events of Default.  Upon the occurrence of any Event of Default hereunder, Payee shall send a written notice of such default to Maker declaring the nature of the Event of Default.  Maker shall have ten (10) business days to cure any Event of Default, if such Event of Default may be cured within such time.  If the Event of Default is not so cured, then Maker shall immediately (and in no event later than two (2) days thereafter) pay the entire outstanding balance under this Note to Payee.  Maker agrees to pay Payee all out-of-pocket costs and expenses incurred by Payee in an effort to collect indebtedness under this Note, including attorneys’ fees and to pay interest at the post-default interest rate as provided in Section 2 of this Note.

 

7.  Independent Counsel; Terms of Transaction.  Maker acknowledges and agrees (i) that the terms of this Note are fair and reasonable to Maker, (ii) that Payee has advised Maker of all terms of the transaction in writing and Maker has been urged to, and given the opportunity to, seek the advice of an independent counsel of Maker’s choice, (iii) that Maker has had a reasonable opportunity to seek such advice from such independent counsel and (iv) that Maker consents to the terms of this Note and the actions contemplated hereby.

 

8.  Miscellaneous.

 

(a)  Lost, Stolen, Destroyed or Mutilated Notes.  In case any Note shall be mutilated, lost, stolen or destroyed, Maker shall have received an executed lost note affidavit attesting to the same, Maker shall issue a new Note of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of any mutilated Note, or in lieu of any Note lost, stolen or destroyed, upon receipt of evidence satisfactory to Maker of the loss, theft or destruction of such Note.

 

(b)  Amendment and Waiver.  Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Maker and Payee.  Any amendment or waiver effected in accordance with this Section shall be binding upon Maker and Payee.

 

  

3

  

(c)  Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

 

	
Address of Payee:

	
Chief Financial Officer

	
  

	
Morrison & Foerster LLP

	
  

	
555 Market Street

San Francisco, CA 94105

Tel. No.: (415) 268-7000

Fax No.: (415) 268-7522

 

	Address of Maker: 	

Pure Bioscience, Inc.

1725 Gillespie Way

El Cajon, CA 92020

Attention: Chief Executive Officer

Tel. No.: (619) 596-8600

Fax No.: (619) 596-8700

 

(d)  Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

(e)  Remedies Cumulative; Failure or Indulgence Not a Waiver.  The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note.  No failure or delay on the part of Payee in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

(f)  Waiver.  Maker waives diligence, presentment, protest and demand and also notice of protest, demand, dishonor and nonpayment of this Note.  No extension of time for the payment of this Note shall affect the original liability under this Note of Maker.  The pleading of any statute of limitations as a defense to any demand against Maker is expressly waived by Maker to the full extent permitted by law.

 

(g)  Setoff.  The obligation to pay Payee shall be absolute and unconditional and the rights of Payee shall not be subject to any defense, setoff, counterclaim or recoupment or by reason of any indebtedness or liability at any time owing by Payee to Maker.

 

(h)  Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of California.

 

  

4

  

(i)  Successors and Assigns.  This Note shall inure to the benefit of Payee and its successors and assigns.  The obligations of Maker hereunder shall not be assignable.

 

(j)  Excessive Interest.  Notwithstanding any other provision herein to the contrary, this Note is hereby expressly limited so that the interest rate charged hereunder shall at no time exceed the maximum rate permitted by applicable law.  If, for any circumstance whatsoever, the interest rate charged exceeds the maximum rate permitted by applicable law, the interest rate shall be reduced to the maximum rate permitted, and if Payee shall have received an amount that would cause the interest rate charged to be in excess of the maximum rate permitted, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing hereunder (without charge for prepayment) and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal, such excess shall be refunded to Maker.

 

[Signature page to follow]

 

 

 

 

 

  

5

  

IN WITNESS WHEREOF, the undersigned has executed and delivered this Note as of the date first above written.

 

 

	 	

“MAKER”

 

PURE BIOSCIENCE, INC.,

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Michael Krall	 
	 	 	

Michael Krall, Chief Executive Officer

	 
	 	 	 	 
	 	 	 	 

 

 

 

  

6exhibit4-1.htm

Exhibit 4.1

	  	  
	
Dated

	
12/20/2012

	
TAYLOR EARNSHAW LIMITED

MOORS CONSULTING LIMITED

VENTURE CAPITAL (EUROPE) LIMITED

ERIC LEESE

CHRISTOPHER WOTTON

(as the Lenders)

and

Vu1 CORPORATION

(as the Borrower)

and

VENTURE CAPITAL (EUROPE) LIMITED

(as the Security Trustee)

	
LOAN AGREEMENT

	  
	
EXECUTION  [    ]12/20/12

  

  

  

 

	
  

	
Table of Contents

	
1.

	
Definitions and Interpretation

	
3

	
2.

	
Facility

	
5

	
3.

	
Purpose

	
5

	
4.

	
Conditions Precedent

	
5

	
5.

	
Drawdown

	
5

	
6.

	
Lenders’ Participation

	
6

	
7.

	
Interest

	
6

	
8.

	
Repayment

	
6

	
9.

	
Prepayment

	
6

	
10.

	
Representations and Warranties

	
6

	
11.

	
Covenants

	
6

	
12.

	
Events of Default

	
6

	
13.

	
Payments

	
7

	
14.

	
Costs and Expenses

	
7

	
15.

	
Security Trustee

	
7

	
16.

	
Assignment

	
7

	
17.

	
Entire Agreement and Variation

	
8

	
18.

	
Counterparts

	
8

	
19.

	
Notices

	
8

	
20.

	
Governing Law and Jurisdiction

	
9

	  	
Executed as a Deed and delivered the day and year first before written.

	
9

	  	
SCHEDULE 1 THE LENDERS

	
10

	  	
SCHEDULE 2 REPRESENTATIONS AND WARRANTIES

	
11

	  	
SCHEDULE 3 COVENANTS

	
13

	  	
SCHEDULE 4 EVENTS OF DEFAULT

	
14

	  	
SCHEDULE 5 THE SECURITY TRUSTEE

	
16

	  	
SCHEDULE 6  DRAWDOWN REQUEST

	
20

 

 

  

2

  

THIS DEED is made   20th   December 2012

 

PARTIES

 

	
(1)

	
THE PARTIES listed in Schedule 1 as lenders (the Lenders); and

 

	
(2)

	
VENTURE CAPITAL (EUROPE) LIMITED incorporated and registered in England and Wales with company number (07877668) whose registered office is at 411 Tower Bridge Business Centre; 46-48 East Smithfield, London E1W 1AW (acting in the capacity as Security Trustee); and

 

	
(3)

	
Vu1 CORPORATION incorporated and registered in California whose registered office is at 469 Seventh Avenue, Suite 356, New York, NY 10018-7605 (the Borrower).

 

RECITALS

 

	
(A)

	
The Lenders have agreed to make available to the Borrower a loan facility upon and subject to the terms and conditions of this Deed.

 

	
(B)

	
It is intended that this document takes effect as a deed notwithstanding the fact that a Party may only execute this document under hand.

 

IT IS AGREED as follows:

 

	
1.

	
Definitions and Interpretation

 

	
  

	
1.1

	
In this Deed the following words and expressions shall (unless the context requires otherwise) bear the following meanings:

 

Advance means a cash advance made or to be made to the Borrower by the Lenders in accordance with clause 5 (Drawdown) or, as the context may admit or require, the principal amount of that cash advance for the time being outstanding;

 

Agreement Date means the date of this Deed;

 

Assignment means the form of assignment between the Lenders and the Borrower dated on or about the date hereof;

 

Available Facility means at any time, the aggregate amount of the Available Commitments of the Lenders.

 

Availability Period means the period 1-month from the Agreement Date, as may be extended from time to time with the consent of the Lenders; 

 

Available Commitment: at any time means a Lender’s Commitment at that time minus:

 

	
  

	
(a)

	
the aggregate amount of their participation in any Advances at that time; and

 

	
  

	
(b)

	
in relation to any proposed Advance, the aggregate amount of their participation in any Advances (other than the proposed Advance) that are due to be made on or before the proposed Drawdown Date;

 

Business Day means any day which is not a Saturday, a Sunday or a bank or public holiday in England;

 

Commitment means in relation to a Lender, the amount set opposite its name under the heading Commitment in Schedule 1 (Lenders) subject to clause 6.3 (Lenders’ Participation);

 

  

3

  

Drawdown Date means the date on which an Advance is, or is to be, made.

 

Drawdown Request means a written notice in substantially the form set out in Schedule 6 (Drawdown Request).

 

Event of Default means any event or circumstance set out in Schedule 4;

 

Facility means a term loan facility of $100,000 made available by the Lenders to the Borrower in accordance with the provisions of this Deed;

 

Facility Limit means $100,000;

 

Finance Documents means this Deed and the Assignment;

 

Finance Parties means the Lenders;

 

Loan means the aggregate amount or amounts of all Advances and the balance thereof outstanding from time to time together with any amount of interest accrued (but un-capitalised) thereon;

 

Material Adverse Effect means any event or circumstance which, in the Lenders’ opinion, is likely to materially and adversely affect the Borrower's ability to perform all or any of its obligations under, or otherwise comply with, the Finance Documents;

 

Party means a party to this Deed;

 

Repayment Date means 6 (six) months from the date of this Agreement;

 

Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect; and

 

	
  

	
1.2

	
In this Deed (unless the context requires otherwise):

 

	
  

	
1.2.1

	
documents in “agreed form” are documents in the form agreed by the Parties and initialled by them or on their behalf for identification;

 

	
  

	
1.2.2

	
“assets” includes present and future properties, revenues and rights of every description;

 

	
  

	
1.2.3

	
the “Borrower”, a “Finance Party” a “Lender” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

 

	
  

	
1.2.4

	
“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

	
  

	
1.2.5

	
a “person” includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) or two or more of the foregoing;

 

	
  

	
1.2.6

	
a “regulation” includes any regulation, rule, official guideline (whether or not having the force of law) of any intergovernmental or supranational body, agency, regulatory, self-regulatory or other authority or organisation;

 

	
  

	
1.2.7

	
headings are used for convenience only and shall not affect its construction or interpretation; and

 

  

4

  

 

	
  

	
1.2.8

	
any reference to a Recital, Clause or Schedule is to a Recital, Clause or Schedule (as the case may be) of or to this Deed.

 

	
2.

	
Facility

 

	
2.1

	
Subject to the conditions of this Deed, the Lenders hereby make available to the Borrower a secured loan facility in an aggregate amount equal to the Facility Limit.

 

	
2.2

	
The rights and obligations of each Lender under the Finance Documents shall be several. Failure by a Lender to perform his obligations under the Finance Documents does not affect the obligations of the other Lenders under the Finance Documents. The rights of each Lender under or in connection with the Finance Documents are separate and independent rights.

 

	
3.

	
Purpose

 

The Borrower shall use all sums borrowed by it under the Facility for working capital within the business and in particular to pay for the transportation of bulbs from Huayi Lighting in China to its customers in USA.

 

	
4.

	
Conditions Precedent

 

	
  

	
4.1

	
The Borrower may not draw down an Advance (other than the Initial Loan) until the  Lenders have confirmed that they is satisfied that:

 

	
  

	
4.1.1

	
the Borrower has entered into the Assignment to the satisfaction of the Finance Parties; and

 

	
  

	
4.1.2

	
the Borrower has passed board resolutions approving the entry into and terms of, and the transactions contemplated by the Finance Documents.

 

	
4.2

	
The Lenders will only be obliged to comply with Clause 6 (Lenders' participation) if on the date on which the Drawdown Request is delivered to the Lenders in accordance with clause 4.1 and on the Drawdown Date:

 

	
  

	
4.2.1

	
no Event of Default is continuing or would result from the proposed Advance; and

 

	
  

	
4.2.2

	
the Borrower represents and warrants to each of the Finance Parties that each of the representations and warranties set out in Schedule 2 of this Deed are true in all material respects.

 

	
5.

	
Drawdown

 

	
5.1

	
Subject to the prior satisfaction of the conditions detailed in Clause 4.1 (Conditions Precedent), the Borrower may request an Advance by delivering a completed Drawdown Request to the Lenders by not later than 11.00 am on the date falling five (1) Business Days before the proposed Drawdown Date (or such shorter time as agreed by the Lenders).

 

	
5.2

	
Each Drawdown Request is irrevocable and will not be regarded as having been duly completed unless the proposed Drawdown Date is a Business Day within the Availability Period.

 

	
5.3

	
The Advance requested must be an amount which is not more than the Available Facility and which is a minimum of £10,000 (or multiples thereof) or, if less, the Available Facility or as otherwise agreed by the Lenders.

 

  

5

  

 

	
6.

	
Lenders’ Participation

 

	
6.1

	
If the conditions set out in this Deed have been met, each Lender shall make its participation in each Advance available to the Borrower by paying its participation in that Advance to the account specified in the applicable Drawdown Request.

 

	
6.2

	
Each Lender’s participation in each Advance shall be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Advance (and as expressed as the percentage set out against each Lender in Schedule 1 hereto).

 

	
6.3

	
The Available Commitments shall be immediately cancelled at the end of the Availability Period.

 

	
7.

	
Interest

 

	
7.1

	
The Advances shall bear a fixed return of interest up to the Repayment Date of $25,000, which shall be deducted from the Loan upon Drawdown.

 

	
7.2

	
Interest will thereafter accrue on the Advances and interest set out at clause 7.1 at the daily rate of 0.3 per cent, capitalised and added to (and become part of) the Loan each calendar month from the Repayment Date.

 

	
8.

	
Repayment

 

The Borrower shall repay the Loan on or prior to the Repayment Date.

 

	
9.

	
Prepayment

 

	
9.1

	
The Borrower may prepay all or part of the Loan at any time, subject to the terms of this Clause 9.

 

	
9.2

	
Any voluntary prepayment shall be of an amount not less than $10,000 and an integral multiple of $10,000 (or the balance of the Loan).

 

	
9.3

	
The Borrower may not reborrow any part of the Loan, which is prepaid, except with the prior written consent of the Lenders.

 

	
10.

	
Representations and Warranties

 

In consideration of the Finance Parties entering into this Deed and the Lenders agreeing to make the Facility available to the Borrower on the terms and conditions of this Deed, the Borrower represents and warrants to each of the Finance Parties on the Agreement Date and on the last Business Day of each calendar month thereafter that each of the representations and warranties as set out in Schedule 2 of this Deed is true and accurate and not misleading by inclusion or omission or otherwise.

 

	
11.

	
Covenants

 

	
11.1

	
The Borrower covenants with the Finance Parties as set out in Schedule 3.

 

	
11.2

	
The covenants given by the Borrower shall remain in force from the date of this Deed for so long as any amount remains outstanding or any Commitment is in force under this Deed.

 

  

6

  

12.         Events of Default

 

	
12.1

	
Notwithstanding Clause 8 (Repayment) above, upon the occurrence of an Event of Default:

 

	
  

	
12.1.1

	
the Borrower shall promptly notify the Security Trustee in writing upon becoming aware of such Event of Default;

 

	
  

	
12.1.2

	
if prior to the Repayment Date, any Lender may declare that all or part of the Loan is payable on demand whereupon the Loan or such part thereof shall immediately become payable on demand;

 

	
  

	
12.1.3

	
the Borrower shall repay to the Lenders the full amount of the Loan (or such part amount of the Loan as may be demanded), together with all accrued interest, immediately on written demand by either Lender at any time after the occurrence of an Event of Default; and

 

	
  

	
12.1.4

	
any Lender may exercise or direct the Security Trustee to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

 

	
13.

	
Payments

 

	
13.1

	
Any amount of the Loan which is repaid in accordance with Clause 8 (Repayment), Clause 9 (Prepayment), Clause 12 (Events of Default) or otherwise under the Finance Documents shall be paid by the Borrower to the Lenders pro rata, in proportion to their outstanding Commitments (and as expressed as the percentage set out against each Lender in Schedule 1 hereto).

 

	
13.2

	
All payments made by the Borrower to the Lenders shall be made to such account as the respective Lenders may have specified for this purpose from time to time, being accounts held with a branch of a bank or other financial institution situated in the United Kingdom.

 

	
  

	
13.3

	
Any certification or determination by a Finance Party of an amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

	
14.

	
Costs and Expenses

 

The Borrower shall, pay all costs and expenses (including legal, printing and out-of-pocket expenses) incurred in connection with the negotiation, preparation and execution of the Finance Documents.

 

	
15.

	
Security Trustee

 

	
15.1

	
Each of the Lenders appoints the Security Trustee to act as their trustee under and in connection with the Finance Documents, subject to the provisions of Schedule 5 (Security Trustee).

 

	
15.2

	
Each of the Lenders authorises the Security Trustee to exercise the rights, powers, authorities and discretions specifically given to the Security Trustee under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

 

	
16.

	
Assignment

 

	
16.1

	
The Borrower shall not assign or novate its rights and obligations under the Finance Documents to any third party without the prior consent in writing of the Finance Parties to such assignment or novation (as the case may be), such consent not to be unreasonably withheld.

 

  

7

  

 

	
16.2

	
Each Finance Party may assign or novate its rights and obligations under the Finance Documents to any other third person or entity, with the prior consent of each other Finance Party.

 

	
17.

	
Entire Agreement and Variation

 

This Deed constitutes the entire agreement between the Parties in respect of the subject matter hereof and may only be varied by a written agreement signed on behalf of each of the Parties.

 

	
18.

	
Counterparts

 

This Deed may be executed in one or more counterparts, all of which together shall together constitute one agreement.

 

	
19.

	
Notices

 

	
  

	
19.1

	
All notices given under this Deed shall be in writing and shall be sent to the address of the recipient as set out in this Clause 21, or such other email address as may be notified in writing between the Parties.

	
19.2

	
Notice details of the Lenders:

	
Name:

	
Venture Capital (Europe) Limited

	  
	
Address:

	
411 Tower Bridge Business Centre, 46-48 East Smithfield, London E1W 1AW

	  
	
Email:

	
zafar@ventureconsultingltd.com

	  
	  	  	  
	  	  	  
	
Name:

	
Moors Consulting Limited

	  
	
Address:

	
The White House, Paignton Road, Stoke Gabriel, Devon, TQ9 6SJ

	  
	
Email:

	
smoors@taylorearnshaw.co.uk

	  
	  	  	  
	
Name:

	
Taylor Earnshaw Limited

	  
	
Address:

	
The White House, Paignton Road, Stoke Gabriel, Devon, TQ9 6SJ

	  
	
Email:

	
smoors@taylorearnshaw.co.uk

	  
	  	  	  
	  	  	  
	
Name:

	
Eric Leese

	  
	
Address:

	
59 Barnfield Road, Hyde, Cheshire, SK14 4EW

	  
	
Email:

	
eric.lees@live.co.uk

	  
	  	  	  
	
Name:

	
Christopher Wotton

	  
	
Address:

	
Fallapit Barton, East Allington, Totnes, Devon, TQ9 7QE

	  
	
Email:

	
chris@justeel.co.uk

	  

\

	
19.3

	
Notice details of the Borrower:

 

	 	 	 
	Address: 	 469 Seventh Avenue, Suite 356, New York, NY 10018-7605	 
	Attention: 	 The Directors	 
	Email:   	 	 

  

8

  

19.4             Notice details of the Security Trustee:

 

	 	 	 
	 Address: 	 411 Tower Bridge Business Centre, 46-48 East Smithfield, London E1W 1AW	 
	 Attention: 	 The Directors	 
	 Email:   	 zafar@ventureconsultingltd.com	 

 

	
20.

	
Governing Law and Jurisdiction

 

This Deed shall be governed by and construed in accordance with the laws of England.  The Parties submit to the exclusive jurisdiction of the English Courts as regards any claim, dispute or matter arising out of or relating to this Deed or any document to be executed pursuant to this Deed.

 

Executed as a Deed and delivered the day and year first before written.

 

  

9

  

SCHEDULE 1

 

THE LENDERS

 

	
Lenders

	
Proportion of Lenders’ Participation (%)

	
Commitment (£)

	
 

VENTURE CAPITAL (EUROPE) LIMITED

 

	
 

7.94%

	
 

$7,940.00

	
 

MOORS CONSULTING LIMITED

	
 

9.52%

	
 

$9,520.00

	
 

 

TAYLOR EARNSHAW LIMITED

 

	
 

76.19%

	
 

$76,190.00

	
 

 

CHRISTOPHER WOTTON

	
 

4.76%

	
 

$4,760.00

	
 

 

ERIC LEESE

 

	
 

1.59%

	
 

$1,590.00

	
Total:

	
100

	
$100,000.00

 

  

10

  

SCHEDULE 2

 

REPRESENTATIONS AND WARRANTIES

 

 

The Borrower represents and warrants to each of the Finance Parties that:

 

	
1.

	
Incorporation

 

The Borrower is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation.

 

	
2.

	
Power

 

The Borrower has power to enter into and comply with its obligations in terms of the Finance Documents.

 

	
3.

	
Authorisations

 

The Borrower has taken all necessary action and obtained all required or desirable consents to enable it to execute, deliver and perform its obligations under the Finance Documents and to make the Finance Documents admissible in evidence in the courts of England and Wales. Any such authorisations are in full force and effect.

 

	
4.

	
Non-conflict

 

	
4.1

	
Execution of and compliance with the Finance Documents does not and will not cause the Borrower to breach:

 

	
  

	
4.1.1

	
any law, regulation, judicial or official order to which it is subject;

 

	
  

	
4.1.2

	
its memorandum or articles of association; or

 

	
  

	
4.1.3

	
any agreement, instrument, letter, undertaking or restriction to which it is a party or subject.

 

	
5.

	
Binding Obligations

 

The Borrower’s obligations under the Finance Documents are, subject to any general principles of law limiting its obligations, legal, valid, binding and enforceable obligations.

 

	
6.

	
Litigation

 

No material litigation is current, pending or (so far as the Borrower is aware having made all diligent enquiries) threatened against the Borrower or its assets nor is there subsisting any unsatisfied judgement or award given against the Borrower by any court, arbitrator or other body.

 

  

11

  

	
7.

	
Default

 

	
7.1

	
No Event of Default is continuing or might reasonably be expected to result from the drawdown of an Advance.

 

	
7.2

	
No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or to which its assets are subject which might, or might with the elapse of time, have a Material Adverse Effect, excluding for the purpose of this  paragraph 7.2 any event or circumstance which the Borrower has notified to the Lenders and which the Lenders have (in their absolute discretion) agreed would not constitute a Material Adverse Effect.

 

  

12

  

SCHEDULE 3

 

COVENANTS

 

	
1.

	
Financial Indebtedness

 

	
  

	
The Borrower shall not, without the prior written consent  of the Lenders (such consent not to be unreasonably withheld or delayed), incur any financial indebtedness other than under this Deed unless the proceeds of such financial indebtedness are used for the purpose of prepaying the Loan in full in accordance with Clause 9 (Prepayment).

 

	
  

	
2.

	
Negative Pledge

 

	
  

	
The Borrower shall not, without the prior written consent of each of the Lenders create, or permit to subsist, any security over any of its assets.

 

	
  

	
3.

	
Disposals

 

The Borrower shall not, without the written consent of each of the Lenders (such consent not to be unreasonably withheld) sell, lease, transfer or otherwise dispose of any material part of its assets other than:

 

	
  

	
3.1

	
trading stock in the ordinary course of business; or

 

	
  

	
3.2

	
assets exchanged for other assets comparable or superior as to type, value and quality.

 

	
  

	
4.

	
Authorisations

 

The Borrower shall obtain all consents, authorisations, franchises, leases and patents necessary (and do all that is needed to maintain them in full force and effect) under any law or regulation to which it may be subject to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability and admissibility in evidence of the Finance Documents in the courts of England and Wales.

 

 

 

 

 

  

13

  

SCHEDULE 4

 

EVENTS OF DEFAULT

 

	
1.

	
Misrepresentation

 

Any representation or statement made or deemed to be made by the Borrower in the Finance Documents is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

 

	
2.

	
Other obligations

 

The Borrower does not comply with any provision of the Finance Documents and such failure (if capable of remedy) is not remedied within 21 days of the earlier of the Security Trustee notifying the Borrower of the default or the Borrower becoming aware of the same.

 

	
3.

	
Insolvency

 

	
3.1

	
The Borrower is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

 

	
3.2

	
The value of the assets of the Borrower is less than its liabilities (taking into account contingent and prospective liabilities).

 

	
3.3

	
A moratorium is declared in respect of any indebtedness of the Borrower.

 

	
4.

	
Insolvency proceedings

 

	
4.1

	
Any corporate action, legal proceedings or other procedure or step is taken in relation to:

 

	
  

	
4.1.1

	
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower;

 

	
  

	
4.1.2

	
a composition, compromise, assignment or arrangement with any creditor of the Borrower;

 

	
  

	
4.1.3

	
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Borrower or any of its assets; or

 

	
  

	
4.1.4

	
enforcement of any security over any assets of the Borrower,

 

or any analogous procedure or step is taken in any jurisdiction.

 

	
5.

	
Material Adverse Effect

 

The occurrence of a Material Adverse Effect.

 

	
6.

	
Sale

 

Any transaction or a series of related transactions occurs pursuant to which any material asset of the Borrower is sold to any person without the prior written consent of each of the Lenders.

 

	
7.

	
Creditors’ process

 

	 	
Any expropriation, attachment, sequestration, distress or execution affects any material asset or assets of the Borrower and is not discharged within 21 days.

  

14

  

 

	
8.

	
Illegality

 

Any or all of the Finance Documents becomes invalid, unlawful, unenforceable, terminated, disputed or ceases to have full force and effect.

 

	
9.

	
Unlawfulness

 

It is or becomes unlawful for the Borrower to perform any of its obligations under the Finance Documents.

 

	
10.

	
Repudiation

 

The Borrower repudiates or evidences an intention to repudiate the Finance Documents.

 

  

15

  

SCHEDULE 5

 

THE SECURITY TRUSTEE

 

	
1.

	
Duties of the Security Trustee

 

	
1.1

	
The Security Trustee shall promptly forward to a Party the original or a copy of any document, which is delivered to the Security Trustee for that Party by any other Party.

 

	
1.2

	
Except where a Finance Document specifically provides otherwise, the Security Trustee is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

	
1.3

	
If the Security Trustee receives notice from a Party referring to this Deed, describing an Event of Default or any non-payment of any amount due under this Deed and stating that the circumstance described is an Event of Default, it shall promptly notify the Finance Parties.

 

	
1.4

	
The Security Trustee’s duties under the Finance Documents are solely mechanical and administrative in nature.

 

	
2.

	
No fiduciary duties

 

	
2.1

	
Unless otherwise expressly stated in any Finance Document, nothing in this Agreement constitutes any Finance Party as a trustee or fiduciary of any other person.

 

	
2.2

	
The Security Trustee shall not be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

 

	
3.

	
Rights and discretions of the Security Trustee

 

	
3.1

	
The Security Trustee may rely on:

 

	
  

	
3.1.1

	
any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

 

	
  

	
3.1.2

	
any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

 

	
3.2

	
The Security Trustee may assume (unless it has received notice to the contrary in its capacity as Security Trustee for the Lenders) that:

 

	
  

	
3.2.1

	
no Event of Default has occurred;

 

	
  

	
3.2.2

	
any right, power, authority or discretion vested in any Party to a Finance Document or the Lenders has not been exercised;

 

	
  

	
3.2.3

	
any notice or request made by the Borrower is made on behalf of and with the consent and knowledge of the Borrower.

 

	
3.3

	
The Security Trustee may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

 

	
3.4

	
The Security Trustee may disclose to any other Party any information it reasonably believes it has received as Security Trustee under this Deed.

 

	
3.5

	
Notwithstanding any other provision of any Finance Document to the contrary, none of the Finance Parties is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty or duty of confidentiality.

 

  

16

  

 

	
4.

	
Lenders’ instructions to the Security Trustee

 

	
4.1

	
Unless the contrary intention appears in a Finance Document, the Security Trustee shall:

 

	
  

	
4.1.1

	
exercise any right, power, authority or discretion vested in it as the Security Trustee in accordance with any instructions given to it by the Lenders or, if so instructed by the Lenders, refrain from exercising any right, power, authority or discretion vested in it as Security Trustee; and

 

	
  

	
4.1.2

	
not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of either of the Lenders.

 

	
4.2

	
The Security Trustee may refrain from acting in accordance with the instructions of any of the Lenders unless it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

 

	
4.3

	
In the absence of instructions from the Lenders, the Security Trustee may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

 

	
4.4

	
The Security Trustee is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party’s consent) in any legal or arbitration proceedings relating to any Finance Document.

 

	
5.

	
Responsibility for documentation

 

	
5.1

	
The Security Trustee is not responsible for:

 

	
  

	
5.1.1

	
the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Security Trustee, the Lenders, the Borrower or any other person given in or in connection with any Finance Document; or

 

	
  

	
5.1.2

	
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

 

	
6.

	
Exclusion of liability

 

	
6.1

	
Without limiting paragraph 6.2 below, the Security Trustee shall not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence, fraud or wilful misconduct.

 

	
6.2

	
No Party (other than the Security Trustee) may take any proceedings against any agent of the Security Trustee in respect of any claim it might have against the Security Trustee or in respect of any act or omission of any kind by that agent in relation to any Finance Document and any agent of the relevant Security Trustee may rely on this paragraph.

 

	
6.3

	
The Security Trustee shall not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Security Trustee if the Security Trustee has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Security Trustee for that purpose.

 

	
7.

	
Lenders’ indemnity to the Security Trustee

 

	
7.1

	
Each Lender shall (in proportion to its share of the Commitments) indemnify the Security Trustee, within three days of demand, against any cost, loss or liability incurred by the Security Trustee (otherwise than by reason of the Security Trustee’s gross negligence, fraud or wilful misconduct) in acting as Security Trustee under the Finance Documents (unless the Security Trustee has been reimbursed by the Borrower pursuant to a Finance Document).

  

17

  

 

	
7.2

	
The Borrower shall promptly on demand by the Security Trustee reimburse each Lender for any payment made by it under paragraph 7.1 above.

 

	
8.

	
Credit appraisal by the Lenders

 

	
8.1

	
Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Security Trustee that it has been, and shall continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

 

	
  

	
8.1.1

	
the financial condition, status and nature of the Borrower;

 

	
  

	
8.1.2

	
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

	
  

	
8.1.3

	
whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

 

	
  

	
8.1.4

	
the adequacy, accuracy and/or completeness of any information provided by any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document

 

	
9.

	
Security Trustee as trustee

 

	
9.1

	
The Security Trustee declares that it holds any security created by the Assignment on trust for the Finance Parties.

 

	
9.2

	
The Security Trustee, in its capacity as trustee or otherwise under any Finance Document is not liable for any failure:

 

	
  

	
9.2.1

	
to require the deposit with it of any title deed, any Finance Document; or any other documents in connection with any Finance Document;

 

	
  

	
9.2.2

	
in it (or its solicitors or other legal counsel) holding any title deed, any Finance Document or any other documents in connection with any Finance Document in its own possession or to take any steps to protect or preserve the same including permitting the Borrower (or its solicitors or other legal counsel) to retain any such title deeds, any Finance Documents or any other documents;

 

	
  

	
9.2.3

	
to obtain any licence, consent or other authority for the execution, delivery, validity, legality, adequacy, performance, enforceability or admissibility in evidence of any such Finance Document;

 

	
  

	
9.2.4

	
to register, file or record or otherwise protect any of the security granted under the Debenture (or the priority of any of the security) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or the security granted under the Finance Documents;

 

  

18

  

 

	
  

	
9.2.5

	
to take or require the Borrower to take any step to render the security created or purported to be created by or pursuant to any such Finance Document effective or to secure the creation of any ancillary security under the laws of any jurisdiction;

 

	
  

	
9.2.6

	
to require any further assurances in relation to any such Finance Document; or

 

	
  

	
9.2.7

	
to insure any asset or require any other person to maintain any such insurance or be responsible for any loss which may be suffered by any person as a result of the lack, or inadequacy or insufficiency, of any such insurance.

 

	
9.3

	
The Security Trustee is not responsible for:

 

	
  

	
9.3.1

	
the right or title of any person in or to, or the balance of, or sufficiency of any part of the security created by any Security Document; or

 

	
  

	
9.3.2

	
the priority of any security created by any Security Document.

 

	
9.4

	
The Security Trustee may accept, without enquiry, any right or title the Borrower may (or may purport to) have to any asset which is the subject of any such Finance Document and shall not be bound or concerned to investigate or make any enquiry into the right or title of the Borrower to any such asset or to require that Borrower to remedy any defect in its right or title to the same.

 

	
9.5

	
Save as otherwise provided in the Finance Documents, all moneys, which under the trusts contained in any Finance Document are received by the Security Trustee in its capacity as trustee or otherwise, may be invested in the name of, or under the control of, the Security Trustee in any investment for the time being authorised by English law for the investment by a trustee of trust money or in any other investments which may be selected by the Security Trustee, Additionally, the same may be placed on deposit in the name of, or under the control of, the Security Trustee at such bank or institution (including the Security Trustee) and upon such terms as the Security Trustee may think fit.

 

	
9.6

	
The Borrower and the Finance Parties agree that the Security Trustee shall not be subject to the duty of care imposed on trustees by the Trustee Act 2000 (the “Act”).

 

	
9.7

	
Where there are any inconsistencies between the provisions of a Finance Document  and the Act and/or the Trustee Act 1925 (together the Trustee Acts), the provisions of that Finance Document shall, to the extent allowed by law, prevail and, in the case of any inconsistency with either of the Trustee Acts, the provisions of that Finance Document shall constitute a restriction or exclusion for the purposes of the Acts.

 

	
9.8

	
The perpetuity period for the trusts contained in this Deed is 80 years.

 

  

19

  

 Execution Pages

 

THE LENDERS

 

 

EXECUTED and DELIVERED as a DEED by)

ERIC LEESE)

Witness Name                                           ...............................................

Witness Signature                                     ...............................................

Witness Address                                      ...............................................

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

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

EXECUTED and DELIVERED as a DEED by)

CHRISTOPHER WOTTON)

Witness Name                                           ...............................................

Witness Signature                                    ...............................................

Witness Address                                      ..............................................

 

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

 

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

EXECUTED and DELIVERED as a DEED by)

VENTURE CAPITAL (EUROPE) LIMITED)

acting by:)

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

Director

Witness Name:                                ...............................................

Witness Signature                          ...............................................

Witness Address                            ...............................................

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

 

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

  

20

  

EXECUTED and DELIVERED as a DEED by)

TAYLOR EARNSHAW LIMITED)

acting by:)

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

Director

Witness Name:                                ...............................................

Witness Signature                          ...............................................

Witness Address                            ...............................................

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

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

EXECUTED and DELIVERED as a DEED by)

MOORS CONSULTING  LIMITED)

acting by:)

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

Director

Witness Name:                                ...............................................

Witness Signature                          ...............................................

Witness Address                             ...............................................

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

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

 

 

  

21

  

THE BORROWER

 

 

EXECUTED and DELIVERED as a DEED by)

Vu1 CORPORATION )

acting by:)

/s/ William B. Smith

Director

Witness Name:                                           Theodore Thiro..........................

Witness Signature                                     /s/ Theodore Thiro .......................

Witness Address                                184 Admiralty Loop ....................

                Staten Island, N.Y. 10309..............

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

 

 

 

THE SECURITY TRUSTEE

EXECUTED and DELIVERED as a DEED by)

VENTURE CAPITAL (EUROPE) LIMITED )

acting by:)

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

Director

Witness Name:                                ...............................................

Witness Signature                          ...............................................

Witness Address                            ...............................................

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

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

 

 

 

22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00212-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00212-of-00352.parquet"}]]