Document:

f8k082112ex10i_rvplus.htm

Exhibit 10.01

 

Memorandum of Understanding

Between

 

ECCO2 Corp,

An Admitted NGO/CSO Member for United Nations Department of Economic

Social Affairs (“Party-1”),

 

Centre for Climate Change & Environmental Studies,

An Admitted NGO/CSO for United Nations Framework Convention on Climate

Change (“Party-2”)

 

Ministry of Environment Katsina State of Nigeria (“Party-3”),

 

United World Charitable Fund,

A Beneficiary to Charles Schwab Charitable Trust Fund (“Party-4”),

 

Hereafter, all Parties collectively to be referred to as ECCO2 Civil Society

Network Programme for Nigeria (“Programme”)

 

	
1. 

	
Aim

	
1.1

	
This Memorandum of Understanding has been developed to;

	   ●	

Formalise and clarify the research and development study for carbon emissions reduction through use of energy efficiency and renewable energy solutions supplied by RVPlus, Inc. (dba ECCO2 Tech) or any manufacturers or suppliers approved by the ECCO2 Civil Society Network for up to $1,800,000,000.00 USD for financial aid for 10-year project (“the Network”)

	   ●	

Formalise and clarify the research and development study for carbon offset development by establishing and managing a clean development mechanism (“CDM”), that shall be supported by the required documentation for United Nations and UNFCCC DOE, Cancun Agreement, and Kyoto Protocol 

 

  

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	   ●	

Formalise and establish a ten (10) year contract for goods and services provided by ECCO2 Corp and affiliated NGOs within 120 days from acceptance of this Letter by all Parties of Programme to support the Mission, which shall be fully guaranteed for payment by United World Charitable Fund and/or other financial aid programs supporting the Mission and Programme (“Contract”)

	   ●	

Formalise and clarify the relationship between all Parties collectively and the secretariat of the ECCO2 Civil Society Network.

 

	
1.2

	
The Memorandum of Understanding outlines the expectations that are placedupon each of the parties in their relationship of engagement as part of the ECCO2 Civil Society Network (ECSN).

 

	
2.

	
Principles

	
2.1

	
All the Programme’s Network partners, staff, interns, consultants and the steering committee will work together to:

	   ●	

Raise awareness of relevant issues and their impact upon climate change, energy efficiency, mitigation, adaptation, and social development within the Katsina State of Nigeria

	   ●	
Inform and influence relevant policy makers, at both state and local government level, about the impact of their policies and practices upon climate change, energy efficiency, mitigation, adaptation, and social development within the Katsina State of Nigeria (“the Mission”)

	   ●	

Enhance the skills, resources, and knowledge base with local and state government within the Katsina State of Nigeria to meet requirements of the Cancun Agreement and Kyoto Protocol currently active with United Nations Framework Convention on Climate Change

 

  

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2.2

	
It is recognised that at the heart of the relationship between all parties of the Programme is the desire to maintain and further develop cooperation through;

	   ●	

The sharing of reliable, current, relevant and accurate information

	   ●	

The mutual development of clear, evidence based policy positions 

	   ●	

Offering a range of support to enable partners to deliver direct services, for example through the provision of joint training, project deployment, or capacity building  

	  ●	

The commissioning, support and development of appropriate and timely research and the dissemination of relevant findings

	   ●	

The engagement of timely, effective campaigning and targeted advocacy

	   ●	The sharing of good practice within our Network of NGO partners

	   ●	

Promoting the principle that the Mission can participate in the development of a wide range of appropriate services, and where possible offering support and practical assistance to participatory initiatives involving the Mission

 

	
2.3

	
All partners must uphold the Mission based approach in their work. Partner organisations must,

	   ●	

Demonstrate commitment to promoting the Mission

	   ●	

Show a commitment to the full implementation of the United Nations Framework Convention on Climate Change and United Nations Department of Economic Social Affairs and promote the Programme’s Statement of Good Practice

	  ●	

Hold a relevant preparation, activities or vision statement for the Mission

 

	
2.4

	
All partners must demonstrate that their area of work is relevant to the work of ECSN. Therefore partner organisations should engage in at least one of the following areas,

	   ●	

The provision of direct services to research and development, project development, monitoring, logistics, and management for Mission

	   ●	

The undertaking of research and analysis on relevant topics connected to the Mission

 

  

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	  ●	

Engagement in lobbying and/or campaigning for relevant reforms regarding the Mission at national and/or global levels by participating in meetings and conferences held by Parties of Programme or the United Nations

 

	
2.5

	
In order to advance the Programme’s vision NGO members must be robust and have enough capacity to deliver on their objectives.

 

	
3. 

	
The commitment from the Programme to Parties and associate members of the Network

 

The Programme will ensure that all Parties and associate members will:

	   ●	

Receive the biannual Programme newsletter

	   ●	

Be invited to participate in the biannual Network meetings

	   ●	

Receive Programme materials, for example position papers, revisions of the Statement of Good Practice

	   ●	

Benefit from association and support from other Network partners

 

	
4. 

	
Financial Aid, Financing, Remunerations and Fees

	
4.1

	
A start-up fee for the Mission shall be disbursed to Party-2 in the form of a grant, in the amount of $10,000 (USD) paid by Party-4 upon acceptance of this Letter by all Parties.

 

	
4.2

	
A fee for the Mission participation, project development, and management will be disbursed to Party-2 in the form of a grant for the amount of Fifty Thousand Euro Dollars (50,000 Euros) paid by Party-4 upon submission and approval of grant application for Party-4

 

The grant disbursements for Party-2 will continue on a quarterly payment schedule in addition to a remuneration fee of ten percent (10%) of net sales revenue from goods and services invoiced to Party-4 upon completion of any Contract for goods or services of any duration that is established following this Letter

 

  

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4.3.1

	
Party-4 will issue of letter of guarantee for payment to Party-4 in the form of a grant for the approved value and dollar amount to by used towards commercial invoice payments for goods and services from Schedule A of this Letter and the Contract

 

	
4.3.2

	
Party-4 agrees to cooperate with financial aid, credit insurance providers, couriers, lenders, suppliers, and the United Nations in order to meet objections of the Mission

 

	
4.4

	
All partners, excluding party 2 and 3 will be expected to pay their own travel, accommodations and other costs incurred in attending Network meetings

 

	
4.5

	
Network partners are encouraged to actively seek and identify potential donors who are private or based in their country who could make financial contributions to the work of ECSN and the Mission

 

	
5. 

	
Communication

	
5.1 

	
Network partners will designate a named focal point who will lead on coordinating all ECSN based activity within their organisation

 

	
5.2

	
The Programme will endeavour to arrange two Network meetings per year which will be the main forum for discussion on the scope and direction of strategic plan and governance of the Programme.

 

	
5.3

	
A space will be provided on the Programme’s website or affiliated online databases for partners to communicate to each other.

 

	
5.4

	
The Programme will provide a template to aid partners in preparing a brief annual report. The report will be for internal uses only, though it is likely that the report will be drawn on to demonstrate the breadth of the Programme’s work and to support funding applications, and will consider;

 

	   ●	

The ECSN related work partners have undertaken in the previous year and the support they have received from ECSN to assist with this.

 

  

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	   ●	

The ECSN related work partners are proposing to do in the forthcoming year.

	   ●	

A realistic identification of capacity and resources available to develop their work if suitable opportunities arose.

 

	
6.

	
Duration

This Memorandum of Understanding enters into force at the date of the signature of all Parties and shall remain in force until 31st day of December 2013, unless terminated earlier by either of the parties, giving a 30-day notice to the other. The Memorandum of Understanding may be amended by agreement in writing between the all Parties collectively.

 

 

	
7.

	
The Agreement

In signing this Memorandum of Understanding the signatories below confirm that (Name of Agency in undersigned) shall be an associate member of the the Programme. All parties agree to strive to deliver on the mutual commitments outlined at points 3 and 4 above and to uphold the principles as set out at point 2 above. All parties agree to resolve disputes through a process of consultation and engagement. However if a resolution is not forthcoming final decisions will be made by the steering committee.

 

(Signature page is continued onto page 7 of this Letter)

 

  

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EXHIBIT A

PURCHASE AND SALE AGREEMENT

 

	MINISTRY OF ENVIRONMENT FOR NIGERIA	 	§	 
	 	§	KNOW ALL PARTIES BY THESE PRESENTS	 
	STATE OF KATSINA	§	 	 

 

THIS PURCHASE AND SALE AGREEMENT (hereinafter referred to as the “Agreement”) is made and entered by and between RVPLUS, INC. DBA ECCO2 TECH (hereinafter referred to collectively as the “Seller”), and the MINISTRY OF ENVIRONMENT FOR KATSINA STATE OF NIGERIA for the use and benefit of the ECCO2 Civil Society Network Programme for Nigeria (hereinafter referred to as the “Purchaser”).

 

WITNESSETH:

 

In consideration of the mutual covenants and provisions under which Seller agrees to sell, and Purchaser agrees to buy, the Goods and Services hereinafter described for the Purchase Price, under the terms and conditions set forth herein, the parties hereby agree as follows:

 

I. SALE AND PURCHASE.

 

1.01.   Subject to the terms and conditions herein set forth, Seller agrees to sell, convey, and assign to Purchaser, and Purchaser agrees to purchase and accept from Seller, for the Purchase Price (hereinafter defined), all Seller’s right, credit, and interest in and to the following:

 

       A. Clean development mechanism for carbon emissions reduction through use of energy efficiency and renewable energy solutions supplied by Seller as specified in Section 1.1 of Memorandum of Understanding by all parties, collectively that are referred to as ECCO2 Civil Society Network Programme for Nigeria for $1,800,000,000.00 USD for financial aid for 10- year project with payment schedule for first twelve months in amount of $250,000,000.00 USD and the balance due divided into 108 incremental monthly invoices following the 12th month from affective date of this Sale and Purchase Agreement (the “Goods and Services”);

 

       B. The term “Goods and Services” also includes all durable goods, labour, consulting, and soft expenses for the Goods and Services,

 

       C. All Seller’s licenses and rights, if any, whether surface, subterranean, or aerial, pertinent to use of the Goods and Services; and

 

  

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       D. all plans, drawings, specifications, surveys, engineering reports, and other technical information relating to the Goods and Services, in possession of Seller.

 

The above listed items are herein collectively called the “Goods and Services.”

 

1.02.     All of the Goods and Services shall be conveyed, assigned, and transferred to Purchaser at due date of proforma invoice(s) (hereinafter defined in Section 11.01).

 

II. PURCHASE PRICE AND PAYMENT.

 

2.01.     Purchaser agrees to pay Seller a total of $1,800,000,000.00 USD for Good and Services (“Purchase Price”), to be paid by grant funding disbursed to Purchaser.

 

2.02.     The Purchase Price shall be paid in cash on due date of each proforma invoice from Seller. For purposes of this Agreement, “cash” means (i) cash, (ii) a cashier’s check drawn on a banking or other financial institution, (iii) wire transfer to the Seller, (iv) Purchaser-issued warrant, or (v) other agreed upon monetary transfer from the Purchaser to the Seller.

 

III. CREDIT INSURANCE COMMITMENT.

 

3.01.      “Credit Insurance” shall mean a credit insurance provider for Goods and Services to be provided by Seller.

 

3.02.     Within 180 days after the Effective Date (hereinafter defined) of this Agreement, Seller shall furnish and deliver to Purchaser, at Seller's sole cost and expense, an up-to-date commitment for credit insurance written and prepared by the Seller, covering the Good and Services, setting forth the status of credit insurance to the Goods and Services and all other matters of record affecting the Goods and Services, and binding the credit insurance rovider(s) to issue a Credit, Political, and Risk Policy of Insurance. Seller shall furnish therewith original or true, legible copies of all documents referred to in the commitment for credit insurance that constitute encumbrances against the Goods and Services at the date of the credit commitment.

 

3.03.     A credit commitment delivered under this Paragraph III must comply with the following requirements:

 

       (a) the exception for taxes must reflect only the current year and subsequent assessments for prior years due to change in Goods and Services use or ownership;

 

       (b) no exception shall be permitted for “rights of parties in possession”; unless the Purchaser and Seller agree to extend Seller’s possession beyond the due date of proforma invoice by executing a lease; and

 

  

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3.04.     Seller shall cause the Financial Aid to update the credit commitment if the Due date of proforma invoice will extend beyond thirty (30) days after the credit commitment’s effective date. In addition, Seller shall cause the Financial Aid to update the credit commitment within 72 hours prior to the date of the due date of proforma invoice.

 

IV. SURVEY.

 

4.01.     It is acknowledged that Purchaser will provide Seller, at Purchaser's sole cost, a metes and bounds survey (“Survey”) of the Goods and Services showing the location of all easements, including all non-access easements, encumbrances, and encroachments, if any. Purchaser will cause the survey to be recertified to a date beyond the Effective Date of this Agreement, and the Survey shall include a Monitoring Report and Valuation Report survey of the Goods and Services according to United Nations standards. Purchaser shall deliver to the Financial Aid at least one (1) copy of the Survey.

 

4.02.     The Survey shall be in form and substance acceptable to the Financial Aid and shall serve as the basis for deleting (to the maximum extent permitted by applicable regulations) the standard exception for discrepancies or conflicts in boundary lines from the Owner Policy described below in Section 11.02. This deletion of the survey exception shall be at Seller’s  sole expense.

 

4.03.     In the event the legal description of the Goods and Services contained in the Survey differs from the legal description attached to this Agreement, the legal description contained in the Survey shall be the correct description of the Goods and Services and incorporated into this Agreement and used in the Credit Commitment and all due date of proforma invoice documents; provided, however, that Seller shall not be obligated to convey any Goods and Services not owned by Seller.

 

V. ENVIRONMENTAL SITE ASSESSMENT.

 

5.01      Seller/Purchaser has conducted a Level 1 Environmental Site Assessment. If Seller is in possession of any reports, assessments or other documents or information relating to the environmental conditions of the Goods and Services, then Seller shall provide such documents or information to Purchaser within ninety (90) days of execution of this Agreement. Until the date of the Due date of proforma invoice, Purchaser shall have the right to access the Goods and Services for the purpose of further inspecting the Goods and Services to determine environmental and site conditions.

 

5.02.     Notwithstanding any other term or condition of this Agreement to the contrary, in the event the Purchaser determines, in its sole discretion, prior to the Due date of proforma invoice, that the Goods and Services is unsuitable for its purposes for any reason or that the purchase of the Goods and Services is not in the best interest of the ECCO2 Civil Society Network Programme for Nigeria, Purchaser shall have the right to terminate this Agreement by written notice to Seller.

 

  

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VI. DOCUMENTS AND INFORMATION.

 

6.01.     Within fifteen (15) business days after the Effective Date of this Agreement, Seller, at its sole cost and expense, shall deliver or cause to be delivered to Purchaser the following:

 

       A. Legible copies of any and all leases currently in effect, if any, including all amendments and modifications thereof and any related records; and

 

       B. To the extent Seller has not already provided, copies of all engineering and technical reports, documents or other information that relate to the Goods and Services including, without limitation, reports concerning utilities, infrastructure, environmental conditions, soils testing reports, and reports of environmental or hazardous waste inspections or surveys; and

 

       C. A copy of each zoning ordinance, restrictive covenant, deed restriction, Goods and Services use limitation, other Goods and Services use document, and licenses and other agreements affecting the use of the Goods and Services; and

 

       D. Copies of any correspondence received in the preceding twelve (12) months regarding zoning, re-development of specific districts affecting the Goods and Services or adjacent or nearby properties; and

 

       E. Copies of any plans, specifications, blueprints of any improvements on the Goods and Services; warranties, guarantees, maintenance/service agreements, and manuals relating to any equipment, machinery, or systems on the Goods and Services; vendor agreements servicing any of the same; fire protection and alarm equipment manuals and inspection reports; annual budget for the last and current fiscal year of operating the Goods and Services and grounds; a list of any personal Goods and Services that would be included in the conveyance; roof and parking lot installation or repair reports; and copies of a current bill for any utilities serving the Goods and Services.

 

6.02.     The documents described in this Section are herein collectively called the “Documents,” and the information contained in the Documents is herein collectively called the “Information.”

 

VII. SURVEY OR CREDIT OBJECTIONS.

 

7.01.     Purchaser shall have twenty (20) days to review the Credit Commitment and copies of all items referred to therein, the Survey, and the Documents and to deliver in writing to Seller any objections Purchaser may have as a result of such review (“Objections”); provided, however, no objections shall be made by Purchaser to the Financial Aid's standards. Seller and Purchaser agree that this review period shall not commence until Purchaser has received (1) a Credit Commitment in compliance with Paragraph III, (2) a Survey in compliance with Paragraph IV, and (3) Documents under Paragraph VI. Permitted Exceptions shall be those matters, if any, shown on the Survey or listed as exceptions in the credit commitment which are not removed or

cured in the manner provided in this Agreement (herein referred to as the “Permitted Exceptions”).

 

7.02.     Within ten (10) days following receipt of Purchaser’s Objections, Seller shall either (i) diligently and in good faith remedy or remove all such Objections, or (ii) provide written notice to Purchaser of Seller’s intent not to cure such Objections.

 

7.03.     Upon the curing of the Objections, Seller shall provide Purchaser with an updated credit commitment for credit insurance prepared by the Financial Aid, or Purchaser shall provide Seller with a corrected Survey, as may be required. Purchaser shall then be allowed an additional ten (10) days in which to examine the updated credit commitment or corrected Survey and provide written notice to Seller of further Objections arising from changes in the updated credit commitment, if any.

 

7.04.      If Objections are not cured to Purchaser's satisfaction, Purchaser, at Purchaser's option, may, as its sole remedy, elect either to: (i) cancel this Agreement, in which event neither Purchaser nor Seller shall have any further rights or obligations under this Agreement, and this Agreement shall terminate; or (ii) take credit to the Goods and Services in its existing condition without reduction of the Purchase Price, and if Purchaser does so elect, Seller shall deliver credit to the Goods and Services in such condition, subject to the Objections which shall become additional Permitted Exceptions; provided, however, that Seller at its sole cost shall be obligated to cure or remove at or before Due date of proforma invoice all mortgages, deeds of trust, judgment liens, mechanics and materialmen's liens, and other liens against the Goods and Services, whether or not Purchaser objects thereto during the cure period specified above. In addition to the foregoing, Purchaser may elect to cure any Objection and following cure may deduct any costs incurred in such curative efforts from the Purchase Price. In the event Purchaser elects to undertake cure of any Objection and is unable to cure same within ten (10) days following the date the Objection was made, Purchaser shall have the right to avail itself of any legal or equitable remedy available to it with respect to such credit default.

 

7.05.     If Purchaser fails to notify Seller of the Objections within the time period provided for in this paragraph, or if after making any objections, fails to terminate this Agreement, as provided above, within ten (10) days after the expiration of Seller's ten (10) day cure period, then Purchaser shall be deemed to have waived any such Objections, which shall be considered additional Permitted Exceptions for purposes of this Agreement, and the Goods and Services shall be purchased subject to such Permitted Exceptions other than the liens described in this Paragraph (Survey or Credit Objections), which Seller is obligated to cure or remove, without reduction of the Purchase Price.

 

VIII. SELLER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. 

 

8.01.     Seller hereby represents and warrants to, and covenants with Purchaser as follows:

 

  

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       A. Seller has full right, power, and authority to execute and deliver this Agreement and to consummate the purchase and sale transaction provided for herein without obtaining any further consents or approvals from, or the taking of any other actions with respect to, any third parties. This Agreement, when executed and delivered by Seller and Purchaser, will constitute the valid and binding agreement of Seller, enforceable against Seller in accordance with its terms.

 

       B. There are no parties in possession of any portion of the Goods and Services as lessees, tenants at sufferance, or trespassers who have claimed or may claim adversely to the Seller. The Goods and Services shall be delivered free of all tenants and other parties in possession, if any, on date of Due date of proforma invoice.

 

       C. Seller acknowledges that Purchaser will rely upon the Documents and Information delivered to Purchaser by Seller to satisfy itself with respect to the condition of the Goods and Services. Seller, in the event Seller discovers that the Documents or Information delivered to Purchaser hereunder are incomplete, inaccurate, or misleading, due to the passage of time or intervening circumstances, will promptly notify Purchaser of such changes and supplement such Documents or Information with updated Documents or Information.

 

       D. Except as stated below, there are no actions, suits, claims, assessments, or proceedings pending or, to the knowledge of Seller, threatened that could adversely affect the ownership, operation, or maintenance of the Goods and Services or Seller's ability to perform hereunder which will not be cured or dismissed prior to Due date of proforma invoice. Seller’s obligation with regard to litigation and any mechanic’s liens existing prior to the Effective Date will be met by delivery of the Warranty Deed and Owner Policy without any exceptions for such litigation and mechanics liens.

 

       E. To the best of Seller’s knowledge and belief, there is no pending or threatened condemnation or similar proceeding affecting the Goods and Services, or any part thereof, nor is any such proceeding contemplated by any governmental authority.

 

       F. The Goods and Services, to the best of Seller’s knowledge, has not been used as a Goods and Servicesfill or other waste/by-product disposal facility, or for the storage or disposal of any hazardous or toxic substances, nor is there any adverse fact or condition relating to the Goods and Services which has not been specifically disclosed in writing by Seller to Purchaser.

 

       G. The Goods and Services is not located within the boundaries of any municipal utility district, public utility district, or other similar public body. The Goods and Services is not located within an area designated as being subject to special flood hazards by the Army Corp of Engineers, the Federal Insurance Administration, or any other agency or instrumentality having jurisdiction over the Goods and Services.

 

  

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       H. The Goods and Services has full and free uninterrupted access to and from a publicly dedicated street or road. Seller has no knowledge of any fact or condition which would result in the termination or diminution of such access.

 

       I. To the best of Seller’s knowledge and belief, Seller has complied with all applicable laws, ordinances, regulations, statutes, rules, and restrictions pertaining to and affecting the Goods and Services. Performance of this Agreement will not result in any breach of, or constitute any default under, or result in any imposition of, any lien or encumbrance upon the Goods and Services and any agreement or other instrument to which Seller is a party or by which Seller or the Goods and Services might be bound.

 

       J. All bills and other payments due and owing by Seller with respect to the ownership, operation, and maintenance of the Goods and Services have been paid or will be paid in the ordinary course of business. Seller specifically agrees to pay all taxes due and owing for any reason by or upon Due date of proforma invoice. Seller further agrees to pay its pro-rata share of all taxes accrued up to the date of Due date of proforma invoice.

 

       K. To the best of Seller’s knowledge and belief, the Goods and Services is zoned for office use, and no change is contemplated in any applicable laws, ordinances, or restrictions, or any judicial or administrative action, or any action by adjacent Goods and Services owners, or natural or artificial conditions upon the Goods and Services which would prevent, limit, impede, or render infeasible Purchaser’s contemplated use of the Goods and Services.

 

       L. From the date hereof until the date of Due date of proforma invoice, Seller shall: (i) maintain and operate the Goods and Services in a good and businesslike manner in accordance with good and prudent business practices; (ii) not commit or permit to be committed any waste to the Goods and Services; and (iii) not enter, without the prior written consent of Purchaser, into any agreement, execute any instrument, or take any action that would encumber the Goods and Services after Due date of proforma invoice, that would bind Purchaser or the Goods and Services after Due date of proforma invoice, or that would be outside the normal scope of maintenance and operation of the Goods and Services.

 

       M. Seller has not received any written notice of any violation of any ordinance, regulation, law, or statute of any governmental agency pertaining to the Goods and Services or any portion thereof or its condition.

 

       N. Seller, except as provided in this section, agrees that it will not voluntarily enter into or assume any new contracts or obligations for which Purchaser will have liability after Due date of proforma invoice with regard to the Goods and Services which are in addition to, or different from, those furnished and disclosed to Purchaser.

 

       O. Seller will not impair prior to Due date of proforma invoice, the existing water, sewer, gas and electricity lines, storm sewer, and other utility systems on the Goods and Services.

 

  

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8.02.     If Seller has or acquires notice or actual knowledge that any of Seller's representations, warranties and covenants set forth in this section are untrue or inaccurate in any material respect or if on or before Due date of proforma invoice there is any material change with respect to the matters represented and warranted by Seller pursuant to this section, then Seller shall give Purchaser prompt written notice thereof and Purchaser, in its sole discretion, shall have the right to terminate this Agreement.

 

8.03.     All representations, warranties and covenants made by Seller in this Agreement shall survive the Due date of proforma invoice for a period of five (5) years from the date of Due date of proforma invoice. If Purchaser shall, within five (5) years after the date of Due date of proforma invoice, discover a material breach of any of Seller's representations, warranties, or covenants contained in this Agreement, Purchaser shall give written notice thereof to Seller and make a demand for completion of necessary corrective action, or in the alternative, payment of damages calculated to remedy the breach identified by Purchaser, within sixty (60) days after receiving written notice to do so. Purchaser may initiate an action to remedy such breach within ninety (90) days after Seller's failure to cure the breach within the allowed sixty (60) day period. The provisions of this paragraph shall continue and survive the Due date of proforma invoice for the five (5) years period specified herein.

 

IX. INSPECTION AND ACCESS TO GOODS AND SERVICES.

 

9.01.     In addition to any other rights granted to Purchaser hereunder to terminate, cancel, or rescind this Agreement, Purchaser shall have the right to investigate and inspect the Goods and Services at any and all times with any and all such inspections to be at Purchaser's sole risk and expense. Purchaser shall further have the right to engage in preliminary site activities related to the design phase at Purchaser’s sole risk and expense. Purchaser shall give Seller reasonable advance notice of any proposed inspection. Seller shall cooperate in making available to Purchaser access to the Goods and Services and to any records and information relative thereto in Seller's possession which will facilitate such inspection, examination, investigation, testing, analysis, or appraisal as Purchaser may wish to conduct with respect to the Goods and Services. It is stipulated and understood, in connection with such inspections, that Purchaser shall conduct its inspections, examinations, investigations, testing, analyses, or appraisals of the Goods and Services in a manner that will not damage the Goods and Services, nor unnecessarily interfere with any business activity on the Goods and Services.

 

9.02.     If for any reason whatsoever, Purchaser determines that it does not wish to purchase the Goods and Services, Purchaser shall have the right to terminate the Agreement by giving written notice of such termination to Seller in the manner provided for herein. If Purchaser terminates this Agreement pursuant to this Paragraph, all rights, interests, duties, obligations, liabilities, and promises of Purchaser and Seller shall be revoked, cancelled, and null and void. In the event Purchaser terminates this Agreement, Purchaser agrees to deliver to Seller copies of any and all documents, reports, or other information obtained by Purchaser pertaining to the Goods and Services.

 

  

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X. SPECIAL PROVISIONS AND CONDITIONS PRECEDENT.

 

10.01.   Purchaser’s obligations and performance under this Agreement are authorized pursuant to laws of United Nations and Katsina State of Nigeria.

 

10.02.   It is understood and agreed between Purchaser and Seller that there are certain statutory matters and other items required by law concerning the State's right to purchase the Goods and Services. It is agreed and understood that Purchaser promptly will undertake actions to accomplish the following:

 

       A. Issuance of a state warrant in such amounts as will be sufficient to fund the purchase of this Goods and Services as contemplated by this Agreement and to provide the sums necessary to complete due date of proforma invoice of the purchase of the Goods and Services; and

 

       B. any other conditions precedent necessary to protect the State.

 

10.03.   At least twenty (20) days prior to Due date of proforma invoice, Seller shall provide Purchaser with written notice with respect to all water, utility, hospital, drainage, road and other special taxing districts within which the Goods and Services is situated. If the Goods and Services is situated within Katsina State of Nigeria, then at or prior to the Due date of proforma invoice, Seller agrees to give Purchaser the written notice required by that provision, and Purchaser agrees to sign and acknowledge such notice to evidence receipt thereof.

 

10.04.   It is understood and agreed between Purchaser and Seller that each of the above items constitute Conditions Precedent, each and all of which must be met prior to the State being able to purchase under this Agreement, and which must be met prior to Due date of proforma invoice. Upon failure of one or more Conditions Precedent to occur, this Agreement shall terminate by its own terms and be void and of no further effect.

 

XI. DUE DATE OF PROFORMA INVOICE AND POSSESSION.

 

11.01.   Providing Seller has satisfied its obligations hereunder, this transaction shall close no later than ninety (90) days following the Effective date (or the next business day) (the “Due date of proforma invoice”). The Due date of proforma invoice shall be at a time to be designated by mutual agreement with notices of the time and place to be given as provided herein. Unless otherwise specified, Purchaser shall receive and return all due date of proforma invoice documents by overnight mail.

 

11.02.   At the Due date of proforma invoice, the following shall occur:

 

       A. Warranty Deed. Seller shall execute, acknowledge, and deliver its Warranty Deed, substantially in the form of Exhibit B, conveying to Purchaser credit to the Goods and Services in fee simple, subject only to the Permitted Exceptions, and assigning to Purchaser the warranties, if any, of any predecessor in Seller's chain of credit which may be assigned by Seller. The proper legal description of the Goods and Services shall be the description used in the Survey; provided however, that nothing herein shall obligate Seller to convey to the Purchaser any Goods and Services not owned by Seller.

 

  

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       B. Owner's Credit Policy. The Financial Aid shall, at Seller's sole cost and expense, a standard form of Owner’s Policy of Credit Insurance as prescribed by the credit insurance provider dated as of the Due date of proforma invoice date and issued by the Financial Aid, insuring Purchaser's fee simple credit to the Goods and Services in the full amount of the Purchase Price, subject to the Permitted Exceptions, and said Owner Policy shall also be subject to the following matters:

 

       1.  The standard printed exceptions provided for in the standard form of credit insurance approved by Financial Aid;

 

      2.   Any deletion of the survey exception shall be at Seller’s sole expense; and

 

       3.  Exception of lien for taxes shall be limited to current tax year and subsequent assessments for prior years due to change in Goods and Services use or ownership.

 

       C. Ad Valorem Taxes and Assessments. Seller shall be responsible for all ad valorem taxes and assessments on the Goods and Services for all periods prior to Due date of proforma invoice. Purchaser is a tax-exempt entity and shall be responsible for no ad valorem taxes whatsoever. Seller's ad valorem tax liability survives due date of proforma invoice and  includes liability for rollback taxes, if any.

 

       D. Apportionments. Liability and responsibility for the following items shall be apportioned as indicated:

 

       1. Purchaser shall be responsible for the payment of all operating expenses of the Goods and Services attributable to periods commencing on or after due date of proforma invoice and the Seller shall be responsible for the payment of all operating expenses of the Goods and Services incurred for all prior periods.

 

       E. Seller shall supply evidence satisfactory to Purchaser and the Financial Aid that:

 

       1.  The person executing and delivering the due date of proforma invoice documents on behalf of Seller has full right, power and authority to do so;

 

       2.  Seller's United States tax payer identification number is true and correct; and

 

  

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       3. Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of the United States of America of 1954, as amended and otherwise is in compliance with §1.1445-2T of the regulations thereunder.

 

       F. Upon completion of the Due date of proforma invoice, Seller shall deliver to Purchaser possession of the Goods and Services free and clear of all tenancies of every kind and other parties in possession, unless otherwise agreed to by the parties in writing; provided, however that such writing shall be attached to this Agreement as an exhibit and incorporated by reference for all purposes. In addition, Seller shall deliver to Purchaser possession of the Goods and Services in substantially the same condition as on the Effective Date.

 

       G. Purchaser shall deliver the purchase price, to be paid by a warrant drawn on the ECCO2 Civil Society Network Programme for Nigeria.

 

       H. Purchaser shall deliver reasonable evidence of authority to purchase the Goods and Services as may be requested by Seller.

 

        I.   Costs and Fees. Seller shall be solely responsible for and shall pay for the following items or cause these items to be credited to Purchaser at due date of proforma invoice: tax certificates, owner's credit policy, any fees related to corrections to the credit commitment or deletion of the survey exception; escrow fees, Seller's attorney fees, tax prorations, preparation of releases of liens, and recording fees for all releases of liens and other documents save and except the costs of recording the Warranty Deed. All documents prepared by Seller shall be  furnished to Purchaser at least seven (7) days prior to Due date of proforma invoice for  approval. Purchaser shall be responsible for the following items: survey, inspection fees, Purchaser's attorney fees, preparation of the Warranty Deed, escrow fees, and recording fees for the deed.

 

        J.  Due date of proforma invoice Documents. Purchaser shall be responsible for the preparation of the Warranty Deed. Seller shall be responsible for the preparation of all releases of liens, contracts or other items necessary to consummate the due date of proforma invoice. All documents shall be subject to approval by the other party. Seller shall deliver to the Purchaser a “bills paid affidavit” verifying that it has no knowledge of any unpaid bills or claims for labor performed or materials furnished to the Goods and Services prior to due date of proforma invoice. All documents prepared by Seller shall be furnished to Purchaser at least seven (7)  days prior to Due date of proforma invoice for approval.

 

XII. DEFAULT.

 

12.01.   If Seller fails to perform any of Seller's obligations hereunder for any reason other than the termination of this Agreement by Seller or Purchaser pursuant to any right to terminate expressly set forth in this Agreement, or Purchaser's failure to perform Purchaser's obligations under this Agreement, then Purchaser, at Purchaser's option, shall have the right to terminate this Agreement by giving written notice thereof to Seller, whereupon neither Purchaser nor Seller shall have any further rights or obligations hereunder; provided, however that Purchaser shall have the absolute right, upon written notice and demand, to the return in full of all or any portion of the Purchase Price as may have been deposited by Purchaser with the Seller or the Financial Aid prior to or at Due date of proforma invoice. Alternatively, Purchaser may enforce specific performance hereof. The foregoing shall be Purchaser’s only remedies.

 

  

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12.02.   If Purchaser fails to perform any of Purchaser's obligations hereunder for any reason other than the termination of this Agreement by Seller or Purchaser pursuant to any right to terminate expressly set forth in this Agreement, or Seller's failure to perform Seller's obligations under this Agreement, then Seller shall have the right to terminate this Agreement by giving written notice thereof to Purchaser, whereupon neither Purchaser nor Seller shall have any further rights or obligations hereunder. Alternatively, Seller may enforce specific performance hereof, if permitted by law. The foregoing shall be Seller's only remedies.

 

XIII. CASUALTY.

 

13.01.   Seller shall bear all risk of loss or damage to the Goods and Services from all causes until the due date of proforma invoice; provided, however, Seller shall have no obligation to repair such loss or damage. Seller agrees to maintain its present policies of insurance, if any, on the Goods and Services in full force and effect from the date hereof to and including the due date of proforma invoice date.

 

13.02.   If prior to the due date of proforma invoice improvements on the Goods and Services shall be damaged or destroyed by fire, loot, or other casualty, Purchaser may either terminate this Agreement by written notice to Seller or elect to close. If Purchaser elects to close, despite such damage or destruction, Seller shall allow Purchaser to deduct the cost or value of such improvements from the Purchase Price. Any of the aforesaid remedies may be utilized in conjunction with any other remedy at Purchaser’s option.

 

13.03.   If the extent of damage or the amount of insurance proceeds to be made available is not capable of determination prior to the date of the Due date of proforma invoice, either party by written notice to the other may postpone the date of the Due date of proforma invoice to such date as shall be designated in such notice, but not more than sixty (60) days later.

 

XIV. FEDERAL TAX REQUIREMENT FOR “FOREIGN PERSONS.”

 

14.01.   If Seller is not a “foreign person,” as defined in Section 1445 of the Internal Revenue Code of 1954, as amended, and in the Rules and Regulations promulgated by the Treasury Department incident thereto (hereinafter collectively referred to as the “Tax Code”), then at the Due date of proforma invoice, Seller will deliver to Purchaser an Affidavit in the form of Exhibit C so stating and otherwise complying with Tax Code (herein referred to as the “Affidavit as to Foreign Status”).

 

14.02. If Seller is a “foreign person” or if Seller fails to deliver at the due date of proforma invoice the Affidavit as to Foreign Status, subscribed and sworn to as described above, then, in either such event, the Financial Aid is hereby authorized to withhold from the Purchase Price otherwise payable to Seller, all sums required to be withheld by Purchaser under the Tax Code, and the Financial Aid will deliver such amount withheld to the Internal Revenue Service, together with the appropriate forms prescribed by the Department of the Treasury, Internal Revenue Service (with copies being provided both to Seller and to Purchaser).

 

  

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XV. MISCELLANEOUS PROVISIONS.

 

15.01.   Effective Date. The term “Effective Date” as used herein shall mean the date on which Purchaser executes this Agreement and delivers a fully executed counterpart to the Seller.

 

15.02.   Notice. Any notice, demand or request permitted, required or desired to be given in connection with this Agreement shall be in writing and shall be deemed effective if hand delivered or sent by United States certified or registered mail, return receipt requested, postage prepaid, or sent by private, receipted courier guaranteeing same-day or next-day delivery, addressed as follows:

 

	IF TO PURCHASER: 	
COPY TO:

	MINISTRY OF ENVIRONMENT – 	
KATSINA STATE

	
EEC OFFICE COMPLEX

	 
	
UANO ROAD, UATSINA, NIGERIA

	 
	
Attn: Commissioner for Environment, Hon. Alhaji Aminu Ibrahim Safana

	 

 

	IF TO SELLER: 	
COPY TO:

	
RVLUS, INC. DBA ECCO2 TECH

	 
	

100 CONGRESS AVE, SUITE 2000

	 
	

AUSTIN, TX 78701 USA

	 
	

ATTN: CARY LEE PETERSON, CEO

	 

 

15.04.   Time is of the Essence. Time is of the essence in all matters pertaining to the performance of this Agreement. In the event that Seller shall fail for any reason to comply with the time requirements set forth in this Agreement, then the time for Purchaser's response shall be extended for a like period, at Purchaser's discretion, or this contract may be terminated as authorized under Article XII.

 

15.05.   Authority to Contract. The parties to this Agreement warrant and represent to one another that they have the power and authority to enter into this Agreement in the names, credits, and capacities herein stated and on behalf of any entities, persons, estates or firms represented or purported to be represented by such person, and that each has complied with all formal requirements necessary or required by any State and/or federal law in order for each to enter into this Agreement.

 

  

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15.06.   Binding Effect. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, administrators, personal representative, successors and assigns. This Agreement may not be assigned without express prior written consent of Purchaser and Seller.

 

15.07.   Governing Law and Venue. The terms, provisions and conditions of this Agreement shall be governed by and construed in accordance with the laws of the ECCO2 Civil Society Network Programme for Nigeria. Venue for any cause of action, controversy or dispute regarding this Agreement or the subject matter hereof shall be in the Republic of Nigeria. Nothing herein shall be construed as a waiver of the State's sovereign immunity.

 

15.08.   Rule of Construction. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement, and the parties hereby agree that the normal rule of construction (to the effect that any ambiguities are to be resolved against the drafting party) shall not be employed in the interpretation of this Agreement or any amendments or exhibits thereto.

 

15.09.   Severance. In case any one or more of the provisions of this Agreement for any reason shall be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein.

 

15.10.   Headings. The headings contained in this Agreement are for reference purposes only and shall not modify or affect this Agreement in any manner whatsoever. Wherever required by this context, any gender shall include any other gender, the singular shall include the plural, and the plural shall include the singular.

 

15.11.   Contract as Offer. Seller shall have until December 31, 2012, to execute this Agreement in the space provided for Seller's signature and delivering such executed Agreement to Purchaser.

 

15.12.   Survival. Any portion of this Agreement not otherwise consummated at due date of proforma invoice shall survive the Due date of proforma invoice of this transaction as a continuing agreement and obligation of and between the parties for a period of ten (10) years. The parties further stipulate and agree that they intend that this Agreement shall survive any action or proceeding necessary to confirm or obtain Seller's credit to the Goods and Services.

 

15.13.   Consideration. Upon execution of this Agreement, Purchaser has delivered to Seller, and Seller hereby acknowledges the receipt and sufficiency of the independent consideration, as consideration for Purchaser's right to buy the Goods and Services and for Seller's execution, delivery, and performance of this Agreement. The independent consideration is in addition to and independent of any other consideration or payment provided for in this Agreement, is nonrefundable, and shall be retained by Seller notwithstanding any other provision of this Agreement.

 

  

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15.14.   Entire Agreement. This Agreement is the entire agreement between Seller and Purchaser concerning the sale and purchase of the Goods and Services. All prior and contemporaneous agreements of the parties are merged herein, and no modification hereof or subsequent agreement relative to the subject matter hereof shall be binding on either party unless reduced to writing and signed by the party to be bound.

 

THE PARTIES within the Memorandum of Understanding, collectively known as ECCO2 Civil Society Network Programme for Nigeria shall constitute an original agreement, by Purchaser on this 31st day of July 2012.

 

 

24f8k081512ex4i_scivantamed.htm

 

EXHIBIT 4.1

 

THIS 8% CONVERTIBLE DEBENTURE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), NOR UNDER ANY STATE SECURITIES LAW, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL, EITHER FROM COUNSEL TO THE COMPANY OR COUNSEL TO THE HOLDER HEREOF WHO IS REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH 8% CONVERTIBLE DEBENTURE OR COMMON STOCK MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.

 

SCIVANTA MEDICAL CORPORATION

8% Convertible Debenture

Due August 15, 2015

 

$100,000

 

As of August 15, 2012

 

SCIVANTA MEDICAL CORPORATION, a corporation incorporated under the laws of the state of Nevada (the “Company” or “Maker”), for value received, hereby promises to pay to Zanett Opportunity Fund, Ltd., or its registered assigns (the “Payee” or “Holder”), at c/o Appleby Spurling, Canon’s Court, 22 Victoria Street, P.O. Box HM 1179 Hamilton, HM EX, Bermuda, upon due presentation and surrender of this 8% Convertible Debenture (this “Debenture”), on or after August 15, 2015 (the “Maturity Date”), the principal amount of One Hundred Thousand  Dollars ($100,000) and accrued interest thereon as hereinafter provided.

 

This Debenture was issued by the Company as of August 15, 2012 (the “Issuance Date).

 

ARTICLE I

PAYMENT OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT

 

1.1.          Payment of Principal and Interest.  Payment of the principal and accrued interest on this Debenture shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.  Interest (computed on the basis of a 360-day year for the number of days elapsed) on the unpaid portion of said principal amount from time to time outstanding shall be paid by the Company at the rate of eight percent (8%) per annum, in like coin and currency, or at the option of the Company in shares of the Company’s Common Stock (as hereinafter defined), payable to the Payee in annual installments on each August 15 during the term of this Debenture (an “Interest Payment Date”), with the first Interest Payment Date hereunder scheduled to be August 15, 2013 and the last Interest Payment Date to be on the Maturity Date.  Interest shall accrue from the Issuance Date.  Both principal hereof and interest thereon are payable at the Holder’s address above or such other address as the Holder shall designate from time to time by written notice to the Company.  The Company will pay or cause to be paid all sums becoming due hereon for principal and interest by check, sent to the Holder’s above address or to such other address as the Holder may designate for such purpose from time to time by written notice to the Company, without any requirement for the presentation of this Debenture or making any notation thereon, except that the Holder hereof agrees that payment of the final amount due shall be made only upon surrender of this Debenture to the Company for cancellation.

 

If the Company elects to pay the interest due on a particular Interest Payment Date in shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), the number of shares issued as payment of the accrued interest shall be equal to the quotient of the aggregate accrued and unpaid interest divided by the Market Price (as defined in Section 4.1 hereof) on the Interest Payment Date.  No fractional shares or scrip representing fractional shares will be issued upon the payment of accrued interest, but a payment in cash will be made, in respect of any fraction of a share which would otherwise be issuable in connection with the payment of accrued interest in shares of Common Stock.

 

  

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Prior to any sale or other disposition of this instrument, the Holder hereof agrees to endorse hereon the amount of principal paid hereon and the last date to which interest has been paid hereon and to notify the Company of the name and address of the transferee in accordance with the terms of Section 2.4 of this Debenture.

 

1.2.          Extension of Payment Date.  If this Debenture or any installment hereof becomes due and payable on a Saturday, Sunday or other day on which banks in the state of New Jersey are authorized to remain closed, the due date hereof shall be extended to the next succeeding full Business Day (as defined in Section 4.1 hereof).  All payments received by the Holder shall be applied first to the payment of all accrued interest payable hereunder.

 

ARTICLE II

CONVERSION AND OTHER RIGHTS

 

2.1.          Conversion into Common Stock at Option of Holder.  At any time and from time to time until the Maturity Date, this Debenture is convertible in whole or in part at the Holder’s option into shares of Common Stock, upon surrender of this Debenture, at the office of the Company, accompanied by a written notice of conversion in the form of Attachment I hereto, or otherwise in form reasonably satisfactory to the Company, duly executed by the registered Holder or his, her or its duly authorized attorney.  The aggregate principal amount of this Debenture shall be convertible at any time from the Issuance Date until the Maturity Date into shares of Common Stock at a price per share equal to $0.04 (“Conversion Price”), subject to the adjustments as provided for in Section 2.6.  Interest shall accrue to and include the day prior to the date of conversion and shall be paid by check or in shares of Common Stock on the last day of the month in which conversion rights hereunder are exercised.  No fractional shares or scrip representing fractional shares will be issued upon any conversion, but a payment in cash will be made, in respect of any fraction of a share which would otherwise be issuable upon the surrender of this Debenture for conversion.  As soon as practicable following conversion and upon the Holder’s compliance with the conversion procedures described in Section 2.3 hereof, the Company shall deliver a certificate for the number of full shares of Common Stock issuable upon conversion and a check for any fractional share and, in the event this Debenture is converted in part, a new Debenture of like tenor in the principal amount equal to the remaining principal balance of this Debenture after giving effect to such partial conversion.

 

2.2.          Conversion into Common Stock at Option of Company.  In the event that there shall occur (a) any consolidation, merger or acquisition of the Company with, into or by any other corporation or other entity or person, or any other corporate reorganization, in which the shareholders of the Company immediately prior to such consolidation, merger, acquisition or reorganization, own less than 50% of the Company’s voting power immediately after such consolidation, merger or acquisition, by vote or value, on a fully diluted basis, or (b) the closing of a financing involving the Company’s Common Stock that results in gross proceeds to the Company, on a cumulative basis, of at least six hundred thousand dollars ($600,000), at the option of the Company, the principal of this Debenture, in whole or in part, shall be converted into shares of Common Stock at the Conversion Price, subject to the adjustments provided in Section 2.6.  Interest shall accrue to and include the day prior to the date of conversion and shall be paid by check or in shares of Common Stock, pursuant to Section 1.1, on the last day of the month in which conversion rights hereunder are exercised.

 

2.3.          Maximum Conversion.  Neither the Holder nor the Company shall be entitled to convert on a conversion date that amount of this Debenture in connection with that number of shares of Common Stock which would be in excess of the sum of (a) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on a conversion date, and (b) the number of shares of Common Stock issuable upon the conversion of this Debenture with respect to which the determination of this provision is being made on a conversion date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the issued and outstanding shares of Common Stock of the Company on such conversion date.  For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 13d-3 thereunder.

 

  

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2.4.          Transfer of Debenture; Conversion Procedure.  This Debenture is not divisible.  This Debenture and all rights hereunder may be sold, transferred or otherwise assigned to any person in accordance with and subject to the provisions of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder.  Upon the transfer of this Debenture through the use of the assignment form attached hereto as Attachment I, and in accordance with applicable law or regulation, and the payment by the Holder of funds sufficient to pay any transfer tax, the Company shall issue and register this Debenture in the name of the new Holder.

 

The Company shall convert this Debenture upon surrender thereof for conversion properly endorsed and accompanied by a properly completed and executed Conversion Notice attached hereto as Attachment II and any documentation deemed necessary by the Company showing the availability of an exemption under applicable state and federal securities laws.  Subject to the terms of this Debenture, upon surrender of this Debenture, the Company shall issue and deliver with all reasonable dispatch to or upon the written order of the Holder of this Debenture and in such name or names as such Holder may designate, a certificate or certificates for the number of full shares of Common Stock due to such Holder upon the conversion of this Debenture.  The person or persons to whom such certificate or certificates are issued by the Company shall be deemed to have become the holder of record of such shares of Common Stock as of the date of the surrender of this Debenture.  Upon conversion, the Holder will be required to execute and deliver any documentation deemed necessary by the Company showing the availability of an exemption under applicable state and federal securities laws.

 

2.5.          Covenants.

 

(a)           Issuance and Shares of Common Stock upon Conversion.  The Company covenants that it will at all times reserve and keep available, free from preemptive rights, out of its authorized Common Stock, solely for the purpose of issuance upon conversion of this Debenture, such number of shares of Common Stock as shall equal the aggregate number of shares of Common Stock that would be issued under this Debenture if fully converted.  The Company also covenants that all of the shares of Common Stock that shall be issuable upon conversion of this Debenture shall, at the time of delivery, and, subject to Section 2.4(c) hereof, be duly and validly issued, fully paid, nonassessable and free from all taxes, liens and charges with respect to the issue thereof (other than those which the Company shall promptly pay or discharge).

 

(b)           Restrictive Legend.  Each certificate evidencing shares of Common Stock issued to the Holder following the conversion of this Debenture shall bear the following restrictive legend or a similar legend until such time as the transfer of such security is not restricted under the federal securities laws:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

 

 

2.6.         Adjustment of Conversion Price and Number of Underlying Shares.  The number of shares of Common Stock issuable upon the conversion of this Debenture and the Conversion Price shall be subject to adjustment from time to time as follows:

 

(a)                 Adjustment for Stock Splits and Combinations.  If the Company at any time or from time to time after the date of this Debenture effects a subdivision of the outstanding Common Stock or combines the outstanding shares of Common Stock, then, in each such case, the Conversion Price in effect immediately prior to such event shall be adjusted so that each Holder of conversion rights under this Debenture shall have the right to convert his, her or its interests into the number of shares of Common Stock which he, she or it would have owned after the event had such shares of Common Stock been converted immediately prior to the occurrence of such event.  Any adjustment under this Section 2.4(a) shall become effective as of the date and time such subdivision or combination becomes effective.

 

 

  

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(b)                 No Impairment.  The Company will not, through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company.

 

(c)                 Record Date.  If the Company takes a record of the holders of Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock, or in any rights, options or warrants to subscribe for or to purchase Common Stock (such rights or options or warrants being herein called “Options”) or in any stock or other securities convertible into or exchangeable for Common Stock (such convertible or exchangeable stock or securities being herein called “Convertible Securities”) or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

(d)                 Actions to Maintain Conversion Price Above Par Value.  Before taking any action which would cause an adjustment in the Conversion Price such that, upon conversion of this Debenture, shares of Common Stock with par value, if any, would be deemed to be issued below the then par value of the Common Stock, the Company will take any corporate action which may, in the opinion of its counsel, be reasonable necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock at the Conversion Price as so adjusted.

 

(e)                 Certificate of Adjustment.  In any case of an adjustment of the number of shares of Common Stock or other securities issuable upon conversion of this Debenture, the chief financial officer or the president of the Company shall compute such adjustment in accordance with the provisions hereof and prepare and sign a certificate showing such adjustment, and shall mail such certificate, by first class mail, postage prepaid, to the Holder of this Debenture at the Holder’s address as shown in the Company’s books.  The certificate shall set forth such adjustment, showing in detail the facts upon which such adjustment is based, including a statement of the number of shares of Common Stock and the type and amount, if any, of other property which at the time would be received upon conversion of this Debenture.

 

(f)                  Notices of Record Date.  In the event of (i) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, (ii) any reclassification or recapitalization of Common Stock outstanding involving a change in Common Stock or (iii) any consolidation, merger, sale of all or substantially all of the Company’s assets to another Person (as defined in Section 4.1 hereof) and any transaction which is effected in such a way that holders of more than fifty percent (50%) of the shares of Common Stock then outstanding are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets of another Person with respect to or in exchange for Common Stock (being herein called a “Change of Control”) or voluntary or involuntary dissolution, liquidation or winding up of the Company, the Company shall mail to the Holder of this Debenture, not less than ten (10) days and not more than sixty (60) days prior to the date on which the books of the Company shall close, the record date specified therein or the effective date thereof as the case may be, a notice specifying (A) the material terms and conditions of the proposed action, (B) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (C) the date on which any such Change in Control, dissolution, liquidation or winding up is expected to become effective, and (D) the time, if any, that is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Change of Control, dissolution, liquidation or winding up.

 

  

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(g)                Notices.  Any notice required by the provisions of this Section 2.6 shall be in writing and shall be deemed given upon delivery if delivered personally or by a recognized commercial courier with receipt acknowledged, or upon the expiration of seventy-two (72) hours after the same has been deposited in the United States mail, by certified or registered mail, return receipt requested, postage prepaid, and addressed to the Holder at his, her or its address appearing on the books of the Company.

 

(h)                Closing of Books.  The Company will at no time close its transfer books against the transfer of any shares of Common Stock issued or issuable upon the conversion of this Debenture in any manner which interferes with the timely conversion of this Debenture into shares of Common Stock.

 

ARTICLE III

REGISTRATION RIGHTS

 

3.1.           Incidental Registration. If at any time after the Issuance Date, the Company proposes to register any of its Common Stock under the Securities Act by registration on any form other than Form S-4 or S-8, whether or not for sale for its own account, it shall each such time give prompt written notice to the Holder of its intention to do so and of the Holder’s registration rights under this Article III. Upon the written request of the Holder, made as promptly as practicable and in any event within ten (10) Business Days after the receipt of notice from the Company (which request shall specify the Registrable Securities as such term is defined in Section 4.1 hereof, intended to be disposed of by the Holder and the intended method of disposition), the Company shall use its reasonable best efforts to effect, in the Registration Statement, the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by the Holder to the extent required to permit the disposition of such Registrable Securities in accordance with the intended methods thereof described as aforesaid; provided, however, immediately upon notification to the Company from the managing underwriter of the price at which such securities are to be sold, if such price is below the price which the Holder shall have indicated to be acceptable to it, the Company shall so advise the Holder of such price, and the Holder shall then have the right to withdraw its request to have its Registrable Securities included in such Registration Statement; provided, further, that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, (a) give written notice of such determination not to register, and thereby be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the registration expenses in connection therewith), and (b) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registering such other securities.

 

If the managing underwriter of any underwritten offering under this Section 3.1 shall inform the Company by letter that, in its opinion, the number or type of Registrable Securities requested to be included in such registration would adversely affect such offering, and the Company has so advised the Holder in writing, then the Company will include in such registration, to the extent of the number and type that the Company is so advised can be sold in (or during the time of) such offering, first, all securities proposed by the Company to be sold for its own account, and second, such Registrable Securities requested to be included in such registration pursuant to this Debenture and all other securities proposed to be registered, pro rata, based on the number of securities proposed to be registered.

 

3.2.           Obligations of the Company.  In connection with the registration of the Registrable Securities as contemplated by Section 3.1, the Company shall:

 

(a) prepare a Registration Statement and file it with the Securities and Exchange Commission (the “SEC”),  and thereafter use its reasonable best efforts to cause the Registration Statement to become effective, which Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading;

 

(b) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement for a period of nine (9) months;

 

  

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(c) furnish to the Holder such number of copies of a prospectus, including a preliminary prospectus and all amendments and supplements thereto, and such other documents, as the Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Holder;

 

(d) use reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or Blue Sky laws of such jurisdictions reasonably requested by the Holder, (ii) prepare and file in those jurisdictions all required amendments (including post-effective amendments) and supplements, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times the Registration Statement is in effect, and (iv) take all other actions necessary or advisable to enable the disposition of such securities in all such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Article III;

 

(e) use its best efforts to prepare a supplement or amendment to the Registration Statement to correct any untrue statement or omission, and deliver a number of copies of such supplement or amendment to the Holder as he, she or it may reasonably request;

 

(f) promptly notify the Holder (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of any stop order or other suspension of effectiveness of the Registration Statement, and make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible time;

 

(g) provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement; and

 

(h) cooperate with the Hoenable such certificates to be in such denominations or amounts, as the case may be, and registered in such names as the managing underwriter or underwriters, if any, or the Holder may reasonably requestlder and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be sold pursuant to the Registration Statement and .

 

3.3.          Obligations of the Holder.

 

(a) It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Debenture with respect to the Holder that the Holder shall furnish to the Company such information regarding the Holder, the Registrable Securities held by the Holder and the intended method of disposition of such securities as shall be reasonably required to effect the registration of the Registrable Securities and shall execute such documents and agreements in connection with such registration as the Company may reasonably request.  At least five (5) Business Days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Holder of the information the Company requires from he, she or it (the “Requested Information”) if he, she or it elects to have any of its Registrable Securities included in the Registration Statement.  If within three (3) Business Days of the filing date the Company has not received the Requested Information from the Holder, then the Company may file the Registration Statement without including Registrable Securities of the Holder.

 

(b) The Holder, by its, his or her acceptance of the Registrable Securities, agrees to cooperate with the Company in connection with the preparation and filing of any Registration Statement hereunder.

 

(c) In the event of an underwritten offering, the Holder agrees to enter into and perform its obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and to take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless the Holder has decided not to participate.

 

  

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(d) The Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.2(e), the Holder will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until its, his or her receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.2(e) and, if so directed by the Company, the Holder shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of such destruction) all copies, other than permanent file copies then in its, his or her possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

3.4.          Expenses of Registration.  In connection with any and all registrations pursuant to Article III, all expenses other than underwriting discounts and commissions incurred in connection with registration, filings or qualifications, including, without limitation, all registration, listing, filing and qualification fees, printing and accounting fees and costs, the fees and disbursements of counsel for the Company shall be borne by the Company.

 

3.5.          Indemnification.  In the event any Registrable Securities are included in a Registration Statement under this Debenture:

 

(a) To the extent permitted by law, the Company will indemnify and hold harmless the Holder (in such capacity) and its members, managers, directors, officers and/or agents, any underwriter (as defined in the Securities Act) for the Holder, and each person, if any, who controls any such underwriter within the meaning of Section 15 of the Securities Act (each, an “Indemnified Party”), against any losses, claims, damages, expenses, liabilities (joint or several) (collectively, “Claims”) to which any of them may become subject under the Exchange Act, or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (each, a “Violation”); (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented if the Company files any amendment thereof or supplement thereto with the SEC), or the omission or alleged omission to state therein a material fact required to be stated therein, or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Subject to the restrictions set forth in Section 3.5(d) with respect to the number of legal counsel, the Company shall promptly reimburse the Holder, and each such other person entitled to indemnification under this Section 3.5, as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim, whether or not such Claim, investigation or proceeding is brought or initiated by the Company or a third party. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 3.5(a) shall not (i) apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by the Holder expressly for use in connection with the preparation of the Registration Statement, any prospectus or any such amendment thereof or supplement thereto or any failure of the Holder to deliver a prospectus as required by the Securities Act; or (ii) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holder and shall survive the transfer of the Registrable Securities by the Holder as provided herein.

 

(b) In connection with any Registration Statement in which the Holder is participating in such capacity, the Holder agrees to indemnify and hold harmless, to the same extent and in the same manner set forth in Section 3.5(a), the Company, each of its directors, each of its officers who signs the Registration Statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other stockholder selling securities pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder or underwriter (each, also an “Indemnified Party”), against any Claim to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by the Holder expressly for use in connection with such Registration Statement; and the Holder shall promptly reimburse an Indemnified Party, as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by the Indemnified Party in connection with investigating or defending any such Claim, whether or not such Claim, investigation or proceeding is brought or initiated by the Indemnified Party or a third party; provided, however, that the indemnity agreement contained in this Section 3.5(b) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Holder, which consent shall not be unreasonably withheld.

 

  

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(c) The Company shall be entitled to receive indemnification from underwriters, selling brokers, dealer managers, and similar securities industry professionals participating in the distribution to the same extent as provided above, with respect to information about such persons so furnished in writing by such persons expressly for inclusion in the Registration Statement.

 

(d) Promptly after receipt by an Indemnified Party under this Section 3.5 of notice of the commencement of any action (including any governmental action), such Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 3.5, deliver to an indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly given notice, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party; provided, however, that an Indemnified Party shall have the right to retain its, his or her own counsel, with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel for such party, representation of such party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such party and any other party represented by such counsel in such proceeding.  The Company shall pay for only one legal counsel for the Holder and any Indemnified Party related thereto; such legal counsel shall be selected by the Holder or such other Indemnified Party subject to the Company’s approval which shall not be unreasonably withheld.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to another under this Section 3.5, except to the extent that such failure to notify results in the forfeiture by the indemnifying party of substantive rights or defenses.  The indemnification required by this Section 3.5 shall be made by periodic payments of the amount thereof during the course of the investigation or defense as such expense, loss, damage or liability is incurred and is due and payable.

 

3.6. Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which, he, she or it would otherwise be liable under Section 3.5 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under Section 3.5, (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning used in the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation, and (c) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

 

  

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ARTICLE IV

MISCELLANEOUS

 

4.1.          Definitions.  In addition to those terms already defined herein, the following terms as used in this Debenture shall have the meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person.  For purposes of this definition, “controlling” (including with its correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person shall mean the possession, directly or indirectly, of the power (a) to vote or direct the vote of ten percent (10%) or more of the securities having ordinary voting power for the election of directors of such Company or (b) to direct or cause the direction of the management and policies of such corporation, whether through the ownership of securities, by contract of otherwise.

 

“Associate” shall mean, with respect to any Person, (i) a corporation or organization (other than the Company or a majority-owned Subsidiary of the Company) of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities, (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar capacity, (iii) any relative or spouse of such Person, or (iv) any relative of such spouse who has the same home as such Person or who is a director or officer of the Company or its Subsidiaries.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the state of New Jersey.

 

 “Market Price”  means, as to any security, the average of the closing prices of such security’s sales on all domestic securities markets on which such security may at the time be listed averaged over a period of ten (10) trading days in which the stock traded immediately preceding the day as of which “Market Price” is being determined.  If at any time such security is not listed on any domestic securities exchange or quoted on the OTC Bulletin Board or other domestic over-the-counter market, the “Market Price” shall be the fair value thereof as determined in good faith by a majority of the Company’s Board of Directors (determined without giving effect to any discount for minority interest, any restrictions on transferability or any lack of liquidity of the Common Stock or to the fact that the Company has no class of equity registered under the Securities Act), such fair value to be determined by reference to the price that would be paid between a fully informed buyer and seller under no compulsion to buy or sell.

 

“Person” means an individual, partnership, corporation, trust, unincorporated organization, joint venture, government or agency, political subdivision thereof, or any other entity of any kind.

 

“Registrable Securities” means (i) the shares of Common Stock issuable upon conversion of this Debenture, and (ii) any securities issued or issuable with respect to Common Stock by way of a stock dividend or stock split or in connection with a combination or reorganization or otherwise.

 

“Subsidiary” means, with respect to the Company, any corporation of which an aggregate of fifty percent (50%) or more of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, capital stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned by the Company and/or one or more Subsidiaries of the Company.

 

4.2.          Default.  If one or more of the following described events (each of which being an “Event of Default” hereunder) shall occur and shall be continuing,

 

(i)           any of the representations, covenants, or warranties made by the Company herein shall have been incorrect when made in any material respect; or

 

  

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(ii)           the Company shall breach, fail to perform, or fail to observe in any material respect any material covenant, term, provision, condition, agreement or obligation of the Company under this Debenture, and such breach or failure to perform shall not be cured within thirty (30) days after written notice to the Company; or

 

(iii)          bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, Company shall by any action or answer approve of, consent to or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding or such proceedings shall not be dismissed within sixty (60) calendar days thereafter; or

 

(iv)          a judgment or order for the payment of money in excess of $250,000 shall be rendered against the Company and such judgment or order shall continue unsatisfied and unstayed for a period of ten (10) days and the Company has not filed a formal appeal of such judgment within thirty (30) days of the rendering thereof, then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) or cured as provided herein, the Holder may consider the aggregate principal amount of this Debenture (and all interest through such date) immediately due and payable in cash, without presentment, demand protest or notice of any kind, all of which are hereby expressly waived, anything herein or in any Debenture or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by law.

 

4.3.          Prepayment.  The principal amount of this Debenture and any accrued and unpaid interest thereon may be prepaid, in whole or in part, at any time without penalty or premium, at the discretion of the Company, subject to first offering the Holder the option to convert this Debenture into Common Stock ain accordance with Section 2.1.  The Company must provide written notice to the Holder of its intention to prepay this Debenture and allow the Holder ten (10) days after receipt of such notice to convert.

 

4.4.          Rights Cumulative.  The rights, powers and remedies given to the Holder under this Debenture shall be in addition to all rights, powers and remedies given to him, her or it by virtue of any document or instrument executed in connection therewith, or any statute or rule of law.

 

4.5.           No Waivers.  Any forbearance, failure or delay by the Payee in exercising any right, power or remedy under this Debenture, any documents or instruments executed in connection therewith or otherwise available to the Holder shall not be deemed to be a waiver of such right, power or remedy, nor shall any single or partial exercise of any right, power or remedy preclude the further exercise thereof.

 

4.6.          Amendments in Writing.  No modification or waiver of any provision of this Debenture, or any documents or instruments executed in connection therewith shall be effective unless it shall be in writing and signed by the Holder, and any such modification or waiver shall apply only in the specific instance for which given.

 

4.7.          Governing Law.  This Debenture and the rights and obligations of the parties hereto, shall be governed, construed and interpreted according to the laws of the state of New Jersey.

 

4.8.          Successors.  The term “Payee” and “Holder” as used herein shall be deemed to include the Payee and its successors, endorsees and assigns.

 

4.9.          Stamp or Transfer Tax.  The Company will pay any documentary stamp or transfer taxes attributable to the initial issuance of the Common Stock issuable upon the conversion of this Debenture; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for the Common Stock in a name other than that of the Holder in respect of which such Common Stock is issued, and in such case the Company shall not be required to issue or deliver any certificate for the Common Stock until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s satisfaction that such tax has been paid.

 

  

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4.10.        Mutilated, Lost, Stolen or Destroyed Debenture.  In case this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver in exchange and substitution for and upon cancellation of the mutilated Debenture, or in lieu of and substitution for the Debenture, mutilated, lost, stolen or destroyed, a new Debenture of like tenor and representing an equivalent right or interest, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and an indemnity, if requested, also reasonably satisfactory to it.

 

4.11.        No Rights as Stockholder.  Nothing contained in this Debenture shall be construed as conferring upon the Holder the right to vote or to receive dividends (except as provided in Article II of this Debenture) or to consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election of directors of the Company or of any other matter, or any rights whatsoever as stockholders of the Company.

 

IN WITNESS WHEREOF, Scivanta Medical Corporation has caused this Debenture to be duly executed and delivered as of the date first above written.

 

	 	SCIVANTAMEDICALCORPORATION
	 	 	 
	
 

	
By: 

	/s/ Thomas S. Gifford
	 	 
Name:

	Thomas S. Gifford
	 	 
Title:

	Executive Vice President and Chief Financial Officer
	 	 	 

               

  

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ATTACHMENT I

 

Assignment

 

For value received, the undersigned hereby assigns to _____________, $___________ principal amount of 8% Convertible Debenture due August 15, 2015 evidenced hereby and hereby irrevocably appoints __________________ attorney to transfer the Debenture on the books of the within named corporation with full power of substitution in the premises.

 

Dated:

 

	 In the presence of:	 	 
	 	 	 
	 	 	 
	 	 	Print Name
	 	 	 
	 	 	 
	 	 	Signature

                                            

  

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ATTACHMENT II

 

CONVERSION NOTICE

 

TO:  SCIVANTA MEDICAL CORPORATION

 

The undersigned holder of this Debenture hereby irrevocably exercises the option to convert $________ principal amount of such Debenture (which may be less than the stated principal amount thereof) into shares of Common Stock of Scivanta Medical Corporation, in accordance with the terms of such Debenture, and directs that the shares of Common Stock issuable and deliverable upon such conversion, together with a check (if applicable) in payment for any fractional shares as provided in such Debenture, be issued and delivered to the undersigned unless a different name has been indicated below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned holder of such Debenture, the undersigned will pay all transfer taxes payable with respect thereto.

 

	
Address of Holder

	 	  
	  	 	  
	  	 	  
	  	 	  
	  	 	
Print Name of Holder

	 	 	 
	  	 	  
	  	 	
Signature of Holder

Principal amount of Debenture to be converted $________

 

If shares are to be issued otherwise then to the holder:

 

	
Address of Transferee

	 	  
	  	 	  
	  	 	  
	  	 	  
	  	 	
Print Name of Transferee

	 	 	 
	  	 	  
	  	 	
Social Security or Employer Identification Number of Transferee

 

Issuance Date of Debenture:  August 15, 2012

 

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