Form of Convertible Note, Warrant and Purchase Agreement Clarification Agreement July 26, 2007
Exhibit
10.65
Form
of Convertible Note, Warrant and Purchase Agreement
Clarification
Agreement
July
26, 2007
0
Xxx Xxx
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxx,
XX 00000
Ladies
and Gentlemen:
Reference
is made to the (i) Secured Convertible Promissory Note (the “Note”), dated May
23, 2007, in the principal amount of $____________________, that was issued
by
EVCI Career Colleges Holding Corp. (“EVCI”, “Maker” or the “Company”) to
_________________________ (the “Holder”), (ii) Common Stock Warrant to Purchase
Common Stock of EVCI Career Colleges Holding Corp. (the “Warrant”), dated May
23, 2007, to purchase up to __________________ shares of common stock that
was
issued by EVCI to the Holder and (iii) Securities Purchase Agreement, dated,
April 24, 2007 that is referred to in the Note and Warrant as the “Purchase
Agreement.” Capitalized terms used herein without definition shall have the
meanings set forth in the Note, Warrant and Purchase Agreement, respectively,
as
the context requires.
As
the
result of certain questions that have arisen regarding the accounting treatment
applicable to each of the Note and Warrant, EVCI and the Holder deem it
necessary and desirable to amend the Note and Warrant to clarify that the Holder
shall not have the right to receive any net cash settlement under the Note
(that
exceeds the cash payable upon an Event or Default under Section 7 of the Note)
or the Warrant, in the event the Shareholder Authorization is not obtained.
1. Section
8(b) of the Note is hereby clarified by adding the following as the last
sentence thereof:
The
Maker
shall have no obligation to pay the Holder any cash or other consideration
or
otherwise “net cash settle” the conversion feature of the Note if Maker is
unable to obtain the Share Authorization; provided, however, the Holder shall
not be prevented from seeking or receiving damages in cash if the Share
Authorization is not obtained because the Company has failed to use its
“reasonable best efforts” in violation of Section 4.12 of the Purchase Agreement
or the Company did not “reasonably believe holding the Stockholders Meeting
could result in a violation of applicable law” in violation of Section 4.15(a)
of the Purchase Agreement or because the Board withdrew, modified or amended
its
Board Recommendation in violation of Section 4.15(b) of the Purchase
Agreement.
Convertible
Note, Warrant and Purchase Agreement,
Clarification
Agreement
July
26,
2007
Page
2
2. The
Warrant is hereby clarified by adding the following Section:
16.
No
Net
Cash Settlement.
The
Company shall have no obligation to pay the Holder any cash or other
consideration or otherwise “net cash settle” the Warrant if the Company is
unable to obtain the Share Authorization; provided, however, the Holder shall
not be prevented from seeking or receiving damages in cash if the Share
Authorization is not obtained because the Company has failed to use its
“reasonable best efforts” in violation of Section 4.12 of the Purchase Agreement
or the Company did not “reasonably believe holding the Stockholders Meeting
could result in a violation of applicable law” in violation of Section 4.15(a)
of the Purchase Agreement or because the Board withdrew, modified or amended
its
Board Recommendation in violation of Section 4.15(b) of the Purchase
Agreement.
3. Except
as
amended hereby, the provisions of the Note, Warrant and Purchase Agreement
shall
remain in full force and effect in accordance with their terms. All references
in the Note and Warrant to the Purchase Agreement shall be deemed to include
this Clarification Agreement.
Upon
your
signing and returning to the undersigned the duplicate copy of this letter
enclosed herewith, this Clarification Agreement shall constitute our entire
agreement with respect to its subject matter.
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Very
truly yours,
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Confirmed
and agreed to as
of
July
26, 2007:
By
Name:
Title:
