Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of December 15, 2003 (the
"Agreement"), is by and among NOXSO CORPORATION, a Virginia corporation (the
"Company"), and Cheong Tat Corporation, a Nevada Corporation (the "Investor").
The parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Certain capitalized terms are used in this Agreement
as specifically defined in this Section 1.1 as follows:
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company (or
other specified Person) and shall include (a) any Person who is an officer,
director or beneficial holder of at least 10% of the outstanding capital stock
of the Company (or other specified Person), (b) any Person of which the Company
(or other specified Person) or any officer or director of the Company (or other
specified Person) shall, directly or indirectly, either beneficially own at
least 10% of the outstanding equity securities or constitute at least a 10%
participant, and (c) in the case of a specified Person who is an individual,
Members of the Immediate Family of such Person; provided, however, that the
Investor shall not be Affiliates of the Company for purposes of this Agreement.
"Agreement" is defined in the Preamble.
"Articles of Restatement" is defined in Section 2.4(c).
"Balance Sheet Date" is defined in Section 3.4.
"By-Laws" means all written rules, regulations, procedures and bylaws
and all other similar documents, relating to the management, governance or
internal regulation of a Person other than an individual, each as from time to
time amended or modified.
"CD" is defined in Section 2.2.
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture or partnership agreement or articles or other
charter of any Person other than an individual, each as from time to time
amended or modified.
"Code" means the federal Internal Revenue Code of 1986 or any successor
statute, and the rules and regulations thereunder, as from time to time amended
and in effect.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock.
"Company" is defined in the Preamble.
"Contractual Obligation" means, with respect to any Person, any
contracts, agreements, deeds, mortgages, leases, licenses, other instruments,
commitments, undertakings, arrangements or understandings, written or oral, or
other documents, including any document or instrument evidencing indebtedness,
to which any such Person is a party or otherwise subject to or bound by or to
which any asset of any such Person is subject.
"Convertible Note" is defined in Section 2.4(d).
"Financial Statements" is defined in Section 3.4.
"Closing" is defined in Section 2.3.
"Closing Date" is defined in Section 2.3.
"GAAP" means United States generally accepted accounting principles, as
in effect from time to time, consistently applied.
"Investor Securities" is defined in Section 2.1.
"Investor" is defined in the Preamble.
"Liens" shall mean any and all liens, mortgages, claims, options,
conditional sales agreements, rights of refusal, security interests, pledges,
deeds of trust or other charges or encumbrances, restrictions, legal or
equitable claims or rights of any Person pursuant to the laws of the
jurisdiction, including, but not limited to the United States, any state,
municipality or territory thereof.
"Material Adverse Effect" means a material adverse effect upon the
business, assets, financial condition, income or prospects of the Company.
"Members of the Immediate Family," as applied to any individual, means
each parent, spouse, child, brother, sister or the spouse of a child, brother or
sister of the individual, and each trust created for the benefit of one or more
of such persons and each custodian of a property of one or more such persons.
"Person" means an individual, partnership, corporation, company,
association, trust, joint venture, unincorporated organization and any
governmental department or agency or political subdivision.
"Preferred Stock" means the preferred stock of the Company that is
issuable upon conversion of the Convertible Note.
"Proxy Statement" is defined in Section 5.1(b).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be from time to time amended and in effect.
ARTICLE II
SALE AND PURCHASE OF SECURITIES
2.1 Investor Securities. The Common Stock and Convertible Notes are
being purchased by the Investor are collectively referred to as the "Investor
Securities."
2.2 Agreement to Sell and Purchase. Subject to the terms and conditions
hereof and in reliance on the Investor's representations, warranties and
agreements contained or referred to herein, the Company agrees to issue and sell
to the Investor and, subject to the terms and conditions hereof and in reliance
on the representations, warranties and agreements of the Company contained or
referred to herein, the Investor agrees to purchase at the Closing, Six Million
(6,000,000) shares of Common Stock at $1.25 per share and two Convertible Notes
as described at Section 2.4(d) in the aggregate principal amount of Forty Two
Million Five Hundred Thousand USD ($42,500,000 USD) in consideration for the
assignment of all right, title and interest in the principal amount of a
certificate of deposit issued by Barclays Bank PLC - Isle of Man identified as
N.12387897643189-028 and CUSIP No. UK6592317239-ISIN-00000000-UK0090151 in the
principal amount of Fifty Million Dollars ($50,000,000 USD) and as more fully
described on Exhibit 2.2, attached hereto and incorporated herein by reference.
The principal amount of the CD shall be free and clear of any and all Liens and
which assignment shall be complete at Closing (the "CD").
2.3 Closings. The Closing of the purchase and sale of the Investor
Securities (the "Closing") shall take place in Utah at the offices of NOXSO
Corporation. The Closing shall take place on a date no later than 18th of
December, 2003 (the "Closing Date") or at such other place and time as the
Company and the Investor may otherwise agree. At the Closing, the Company will
deliver to the Investor certificates evidencing the 6,000,000 shares of Common
Stock that Investor is acquiring and the Convertible Notes in the aggregate
principal amount of $42,500,000 and Investor shall deliver to the Company all
documents and approvals required to transfer all right, title and interest to
the CD from the Investor to the Company free and clear of any and all Liens.
2.4 Conditions to Closing for the Investor. The Investor's obligation
to purchase the Investor Securities pursuant to this Agreement on the Closing
Date is subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(a) Representations and Warranties Correct. The
representations and warranties made by the Company herein shall have
been true and correct when made and shall be true and correct on and as
of the applicable closing date with the same force and effect as though
made on and as of such closing date, except for representations and
warranties that are made as of a specific date which shall only be
required to be true and correct as of such date.
(b) Performance. All covenants, agreements and conditions
contained in this Agreement to be performed or complied with by the
Company on or prior to the Closing Date shall have been performed or
complied with and the Company shall not be in default in the
performance of or compliance with any provisions of this Agreement.
(c) Articles of Restatement. The Company's Board of Directors
shall have approved, subject to shareholder approval, the form of the
Articles of Restatement in substantially the same form as attached
hereto as Exhibit 2.4(c) (the "Articles of Restatement").
(d) Convertible Notes. The Company's Board of Directors shall
have approved the issuance of the Convertible Notes in substantially
the same form as attached hereto as Exhibit 2.4(d)(i) and Exhibit
2.4(d)(ii) (the "Convertible Notes").
(e) Secretary's Certificate. The Company shall have delivered
to the Investor copies of each of the following:
(i) the Charter as of the Closing Date;
(ii) the By-Laws of the Company as of the Closing
Date; and
(iii) resolutions of the Board of Directors of the
Company, the form and substance of which are reasonably
satisfactory to the Investor, authorizing the execution,
delivery and performance of this Agreement, including, subject
to shareholder approval, the execution and filing of the
Articles of Restatement and the issuance and sale of the
Investor Securities.
(f) Election of Directors. As of the Closing Date, the Board
of Directors of the Company shall consist of three directors, including
one person selected by the Investor who is reasonably satisfactory to
the Company.
(g) Consents. All consents and approvals to the transactions
contemplated by this Agreement required to be obtained by the Company
from any third party shall have been obtained by the Company.
(h) Legality. Except as otherwise set forth herein, all
authorizations, approvals or permits of any governmental authority or
regulatory body that are required in connection with the lawful
issuance and sale of the Investor Securities pursuant to this Agreement
shall have been duly obtained and shall be in full force and effect.
2.5 Conditions to Closing for the Company. The Company's obligation to
issue and sell the Investor Securities pursuant to this Agreement on
the Closing Date is subject to the satisfaction, on or prior to the
Closing Date, of the following conditions:
(a) Representations and Warranties Correct. The
representations and warranties made by the Investor herein
shall have been true and correct when made and shall be true
and correct on and as of the Closing Date with the same force
and effect as though made on the Closing Date.
(b) Performance. All covenants, agreements and
conditions contained in this Agreement to be performed or
complied with by the Investor on or prior to the Closing Date
shall have been performed or complied with and the Investor
shall not be in default in the performance of or compliance
with any provisions of this Agreement.
(c) Assignment of the CD. The Investor shall have
made arrangements that are acceptable to the Company, in its
sole discretion, for the transfer of all right, title and
interest in and to the principal amount of the CD from the
Investor to the Company free and clear of any and all Liens on
the Closing Date.
(d) Secretary's Certificate. The Investor shall have
delivered to the Company copies of the resolutions of the
Board of Directors of the Investor, the form and substance of
which are reasonably satisfactory to the Company, authorizing
the execution, delivery and performance of this Agreement,
including the assignment of the CD.
(e) Legality. All authorizations, approvals or
permits of any governmental authority or regulatory body that
are required in connection with the lawful issuance and sale
of the Investor Securities pursuant to this Agreement shall
have been duly obtained and shall be in full force and effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investor as of the
Closing Date that:
3.1 Organization. The Company is a duly organized and validly existing
corporation in good standing under the laws of Virginia. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which it does business, except where the failure to be so
qualified would not have a Material Adverse Effect.
3.2 Corporate Power. The Company has all necessary corporate power and
authority to enter into and perform this Agreement, to issue and sell the
Investor Securities hereunder, to own all the properties owned by it and to
carry on the businesses now conducted or presently proposed to be conducted by
it. The Company has taken all corporate action necessary to authorize this
Agreement and the issuance of the Investor Securities to be issued and sold
hereunder.
3.3 Capitalization. The authorized capital stock of the Company as of
the date of the Agreement is set forth in Schedule 3.3. Schedule 3.3 contains a
true and correct list of all outstanding capital stock. The Company has no
outstanding warrants or options as of the date of the Agreement. All of the
outstanding shares of capital stock of the Company, including the Common Stock
to be issued pursuant to this Agreement, will be, upon consummation of the
transactions contemplated by this Agreement, validly issued, fully paid,
nonassessable and subject to no lien or restriction on transfer, except
restrictions on transfer imposed by the securities laws. Other than as set forth
in Schedule 3.3, the Company has no outstanding (i) rights (either preemptive or
otherwise) or options to subscribe for or purchase, or any warrants or other
agreements providing for or requiring the issuance of, any capital stock or any
securities convertible into or exchangeable for its capital stock, (ii)
obligation to repurchase or otherwise acquire or retire any of its capital
stock, any securities convertible into or exchangeable for its capital stock or
any rights, options or warrants with respect thereto, (iii) rights that require
it to register the offering of any of its securities under the Securities Act or
(iv) any restrictions on voting any of its securities.
3.4 Financial Statements. The Investor has been furnished with complete
and correct copies of the following financial statements of the Company (the
"Financial Statements"): (a) the audited balance sheet of the Company as of
March 31, 2003 and the respective related statements of income, retained
earnings and cash flows for the twelve-month period then ended and (b) the
unaudited balance sheet of the Company as of September 30, 2003 (the "Balance
Sheet Date") together with the related consolidated statements of operations and
cash flows for the six-month period then ended. The Financial Statements have
been prepared in accordance with GAAP consistently applied, except that the
September 30, 2003 financial statements do not contain the notes required by
generally accepted accounting principles, and fairly and accurately present the
financial condition of the Company at the date thereof and the results of its
operations for the period covered thereby. All the books, records and accounts
of the Company are accurate and complete, are in accordance with good business
practice and all laws, regulations and rules applicable to the Company and the
conduct of their business and accurately present and reflect all of the
transactions described therein.
3.5 Outstanding Debt: Absence of Liabilities. The Company does not (i)
have any outstanding indebtedness for borrowed money except as reflected in the
Financial Statements and (ii) except as reflected, is not a guarantor or
otherwise contingently liable on such indebtedness of any other Person. The
Company does not have any material liabilities or obligations, contingent or
otherwise, which are not reflected or provided for in the Financial Statements.
3.6 Filings with the Commission. The Company has made available to
Investor its annual report on Form 10-KSB for the period ended March 31, 2003
and its subsequent filings with the Commission.
3.7 Consents. No consent, approval, qualification, order or
authorization of, or filing with any governmental authority is required in
connection with the Company's valid execution, delivery or performance of the
Agreements, or the offer, issue or sale of the Investor Securities by the
Company, the conversion of the Debentures, or the issuance of Common Stock upon
conversion of the Preferred Stock, or the consummation of any other transaction
pursuant to this Agreement on the part of the Company, except the approval and
filing of the Articles of Restatement and filings under applicable federal
securities or blue sky laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company as of the Closing
Date that:
4.1 Organization. The Investor is a duly organized and validly existing
corporation in good standing under the laws of Nevada.
4.2 Corporate Power. The Investor has all necessary corporate power and
authority to enter into and perform this Agreement and to assign, transfer and
convey the CD to the Company hereunder. The Investor has taken all corporate
action necessary to authorize this Agreement and, at the Closing Date, will have
taken all corporate action necessary to authorize the assignment, transfer and
conveyance of the CD from the Investor to the Company.
4.3 The CD. Immediately prior to the transfer of the CD from Investor
to the Company, Investor shall own all right, title and interest in and to the
CD free and clean or all Liens.
4.4 Investor Status.
(a) Investor is an "accredited investor" for purposes of
Regulation D under the Securities Act and has sufficient knowledge and
experience in evaluating and investing in companies similar to the
Company in terms of the Company's stage of development so as to be able
to evaluate the risks and merits of its investment in the Company and
is able financially to bear the risks thereof. Investor was not
organized for the purpose of acquiring the Investor Securities.
(b) Investor is acquiring the Investor Securities for
investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof, and Investor has no present
intention of selling, granting any participation in, or otherwise
distributing the same; provided, however, that the disposition of the
Investor's property shall at all times remain in the Investor's
control. By executing this Agreement, Investor further represents and
warrants that such Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to
any of the Investor Securities.
(c) Investor has had an opportunity to discuss the terms and
conditions of the offering of the Investor Securities and the business,
management and financial affairs with the Company's management and has
received (or had made available to it) any financial and business
documents requested by it.
(d) Investor understands that the Investor Securities to be
purchased hereunder have not been registered under the Securities Act
and must be held indefinitely unless a subsequent disposition thereof
is registered under the Securities Act or is exempt from such
registration.
(e) Investor has no contract, arrangement or understanding
with any broker, finder or similar agent with respect to the
transactions contemplated by this Agreement.
4.5 Legend. Each certificate representing shares of Investor Securities
shall bear a legend in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under the
securities laws of any state, and may not be sold, or otherwise
transferred, in the absence of such registration or unless the issuer
has been furnished with an opinion of counsel satisfactory to the
issuer that such registration is not required."
4.6 Consents. No consent, approval, qualification, order or
authorization of, or filing with any governmental authority is required in
connection with the Investor's valid execution, delivery or performance of the
Agreement, or the assignment, transfer and conveyance of the CD from the
Investor to the Company, or the consummation of any other transaction pursuant
to this Agreement on the part of the Investor.
ARTICLE V
COVENANTS OF THE COMPANY AND THE INVESTOR
5.1 Shareholder Meeting. In an expeditious manner and as soon as
practicable after the execution of this Agreement, the Company shall take all
action necessary in accordance with Virginia law and its Charter and By-Laws to
call, give notice of and convene a meeting of the Company's shareholders to
consider and vote upon the approval of the Articles of Restatement and the
transactions contemplated by this Agreement.
The Company shall, as promptly as practicable, prepare and file with
the Commission a proxy statement (the "Proxy Statement") with respect to the
approval of the transactions contemplated by this Agreement. The Company shall
use reasonable commercial efforts to cause the Proxy Statement to be mailed to
the shareholders of the Company at the earliest practicable date and shall use
reasonable commercial efforts to hold the annual meeting as soon as practicable
after the date hereof. The Proxy Statement will contain a recommendation of the
Board of Directors of the Company that the shareholders of the Company vote in
favor of the issuance of the Investor Securities, approval of the Articles of
Restatement and the transactions contemplated by this Agreement.
5.2 Transfer of the CD. Investor shall take all reasonable commercial
action required to transfer the CD to the Company on the Closing Date. After the
Closing Date, Investor will execute and deliver from time to time at the request
of the Company all such further instruments or power as, in the reasonable
opinion of Company counsel, may be required in order to vest in the Company the
full right, title and interest in and to the CD.
ARTICLE VI
MISCELLANEOUS
6.1 Termination. This Agreement may be terminated, whether before or
after approval by the shareholders of the Company by either the Company or the
Investor, if (i) the conditions to its obligations under Sections 2.4 and 2.5,
as applicable, shall not have been complied with or performed in any material
respect and such noncompliance or nonperformance shall not have been cured or
eliminated (or by its nature cannot be cured or eliminated) by the other party
on or before January 15, 2004 or such later date as agreed to by the Company and
the Investor or (ii) the Closing shall not have occurred prior to the close of
business on January 15, 2004, or such later date as agreed to by the Company and
the Investor; unless in the case of either (i) or (ii), such event has been
caused by the breach of this Agreement by the party seeking such termination.
6.2 Notices. Any notice or other communication in connection with this
Agreement or the Investor Securities shall be deemed to be delivered if in
writing addressed as provided below and if either (a) actually delivered at said
address, (b) in the case of a letter, seven business days shall have elapsed
after the same shall have been deposited in the United States mails, postage
prepaid and registered or certified, return receipt requested or (c) transmitted
to any address outside of the United States, by telecopy and confirmed by
overnight or two-day courier:
If to the Company, to it at 0000 Xxxxx 000 Xxxx, Xxxxxxxxx, Xxxx 00000,
attention: Xxxxxxx Xxxxxxxx, telephone: (000) 000-0000, telecopy: (801)
296-6977, with a copy to Xxxxxxxxx & Xxxxx, 77 West 000 Xxxxx, Xxxxx 000, Xxxx
Xxxx Xxxx, Xxxx 00000, attention: Xxxx Xxxxxxxx, Esq., telecopy (000) 000-0000,
telephone (000) 000-0000 or at such other address as the Company shall have
specified by notice to the Investor.
If to the Investor, to it at 0000 Xxxx Xxxxxxxx Xxxx Xxxxx 000, Xxx
Xxxxx, XX 00000 xxxxxxxxx: XX Xxxx, telephone: (000) 000-0000 xxx 0000,
telecopy: (000) 000-0000 or at such other address as the Investor shall have
specified by notice to the Company.
6.3 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with
the written consent of the Company and the Investor.
6.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. One or more counterparts of this
Agreement or schedule hereto may be delivered via facsimile and such facsimile
counterpart shall have the same effect as an original counterpart hereof.
6.5 Governing Law. This Agreement shall be construed according to the
laws of the State of Utah, without regard to any conflicts of laws provision.
6.6 Assignment. Any rights under this Agreement may be assigned and any
duties under this Agreement may be delegated only with the written consent of
the other party.
The undersigned have executed this Agreement as of the date first above
written.
NOXSO CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X Xxxxxxxx
President & CEO
CHEONG TAT CORPORATION
By: /s/ X.X. Xxxx
----------------------------
X.X. Xxxx
President & CEO
Exhibit 2.2
CONFIRMATION OF OWNERSHIP OF
CERTIFICATE OF DEPOSIT
{SECURITY}
{GUARANTEED}
11:40:31 AM
Xxxxxx Tat Corporation
0000 X. Xxxxxxxx Xx. 000
Xxx Xxxx XX 00000
X.X.X. 4KU456784359LK974545
Blocked Mail 0089546
May 2, 2003
Confirmation: Certificate of Deposit N.12387897643189-028
We have booked to following transaction: Credit
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Credit: USD 50.000.000,00
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Transaction Date: 3.10.2003
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Cusip Number: UK6592317239-ISIN-00000000-UK00
Euroclear: 00000
XXXX: UK8970230895
Transaction Number:
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Details of Transaction: Interest
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Account to be Credited:
Swift:
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Booking Details:
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Value Date(C): 3.10.2004
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Sincerely yours,
BARCLAYS BANK PLC
Eagle Court
00 Xxxxxxxx Xxxx, Xxxxxxx
Xxxx xx Xxx XX00 0XX
Form without Signature
S.E.
[BANK]
BARCLAYS [LOGO] BANK PLC
EXHIBIT 2.4(c)
RESTATED ARTICLES OF INCORPORATION
NOXSO CORPORATION, a corporation organized and existing under the laws
of the State of Virginia, hereby certifies as follows:
1. The name of the Corporation is NOXSO CORPORATION.
2. These Restated Articles of Incorporation were duly adopted by the
Corporation's Board of Directors on December 11, 2003.
3. These Restated Articles of Incorporation were proposed by the Board
of Directors and submitted to the Shareholders at the meeting of Shareholders
held on ______ (following proper notice given to the shareholders in accordance
with the provision of Section 13.1-658 of the Virginia Stock Corporation Act),
at which meeting the holders of ______ shares (more than two-thirds) of the
_______ total number of outstanding shares of Common Stock of the Corporation
entitled to vote thereon, voted in favor of adoption of these Restated Articles
of Incorporation, which amount was sufficient for the adoption thereof.
4. Pursuant to Sections 13.1-710 and 13.1-711 of the Virginia Stock
Corporation Act, these Restated Articles of Incorporation restate and integrate
and further amend the provisions of the original Articles of Incorporation and
all amendments thereto and the Articles of Incorporation are hereby amended to
read in their entirety as follows:
FIRST: The name of the Corporation (which is herein sometimes called
the Corporation) is: NOXSO CORPORATION.
SECOND. The nature of the business, and the objects and purposes to be
transacted, promoted, or carried on, are as follows:
To purchase or otherwise acquire and to sell or otherwise dispose of
real and personal property of any kind; To render services of all
kinds; and to engage in any lawful act or activity for which
corporations may be organized under the general corporate law of the
Commonwealth of Virginia and to do everything necessary, suitable, or
proper for the accomplishment of any of these purposes or of any object
incidental to or connected with any of these purposes.
This Corporation shall be authorized to exercise and enjoy all other
powers, rights and privileges granted by the Virginia Stock Corporation Act, to
corporations organized thereunder, and all the powers conferred by all acts
heretofore or hereafter amendatory of or supplemental to that Act, and the
enumeration of certain powers, rights or privileges granted or conferred by that
Act now or hereafter in force; provided, however, that nothing herein contained
shall be deemed to authorize or permit this Corporation to carry on any
business, to exercise any power, or to do any act which a corporation formed
under that Act may not at the time lawfully carry on or do.
THIRD: The total number of shares of all classes which the Corporation
is authorized to have outstanding is One Hundred Million (100,000,000) shares of
which stock Eighty Million (80,000,000) shares in the par value of $.01 each,
amounting in the aggregate to Eight Hundred Thousand Dollars ($800,000.00) shall
be voting common stock ("Common Stock") and of which Twenty Million (20,000,000)
shares in the par value of $.01 each, amounting in the aggregate to Two Hundred
Thousand Dollars ($200,000.00), shall be preferred stock.
(a) Designation. Of the authorized preferred stock, (a) Two
Million Seven Hundred Fifty Thousand (2,750,000) shares, $.01 par value
per share, shall be of the class designated as "Series A Preferred
Stock" (the "Series A Preferred") and (b) One Million Five Hundred
Thousand (1,500,000) shares, $.01 par value per share, shall be of the
class designated as "Series B Preferred Stock" (the "Series B
Preferred"). The Series A Preferred and Series B Preferred are
sometimes jointly referred to hereafter at the "Preferred Shares").
(b) Rights, Preferences and Restrictions of Stock. The rights,
preferences, privileges and restrictions granted to and imposed upon
the Series A Preferred, the Series B Preferred and the Common Stock are
set forth below.
(c) Dividends.
(i) Dividends on the Series A Preferred. The holders
of Series A Preferred shall be entitled to receive dividends
at the rate of three percent (3%) per share per annum payable
semi-annually, when, if and as declared by the Board of
Directors out of any assets legally available therefor. The
right to such dividends on the Series A Preferred shall be
cumulative. No dividend shall be declared and paid on the
Common Stock or Series B Preferred of the Corporation unless
all current and accrued dividends have been paid on the Series
A Preferred. At the option of the Corporation, dividends are
payable in cash or Series A Preferred stock. The Board of
Directors shall value any Series A Preferred stock distributed
as a dividend.
(ii) Dividends on the Series B Preferred. Each holder
of Series B Preferred shall be entitled to receive dividends
when, as and if declared by the Board of Directors out of
funds legally available therefor, at a rate equal to 1.35
times the rate of dividend declared per share on Common Stock;
provided, however, that no dividend shall be declared or paid
on the Common Stock unless the per share dividend as described
herein is first declared or paid, as the case may be, on the
Series B Preferred.
(iii) Dividends on the Common Stock. Each holder of
Common Stock shall be entitled to receive dividends when, as
and if declared by the Board of Directors out of funds legally
available therefor; provided, however, (a) no dividend shall
be declared or paid on the Common Stock unless the per share
dividend as declared or paid, as the case may be, has first
been declared or paid, as the case may be, on the Series B
Preferred.
(d) Liquidation, Dissolution or Winding Up. In the event of
any liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary, distributions to the shareholders of the
Corporation shall be made in the following manner:
(i) Each holder of Preferred Shares shall receive,
prior and in preference to any distribution of any of the
assets of the Corporation to the holders of Common Stock by
reason of their ownership of Common Stock, an amount equal to
the sum of (i) $10.00 per Preferred Shares (which amount shall
be subject to equitable adjustment whenever a stock split,
combination, reclassification or other similar event involving
the Preferred Shares shall occur) held by such holder plus
(ii) all declared but unpaid dividends on the Preferred
Shares, if any, to and including the date full payment of such
preferential amount shall be tendered with respect to such
shares to the holder of such shares in connection with such
liquidation, dissolution or winding up. If the assets of the
Corporation legally available for distribution shall be
insufficient to permit the payment in full to all such holders
of Preferred Shares of the full aforesaid preferential
amounts, then the entire assets of the Corporation legally
available for distribution shall be distributed ratably among
the holders of Preferred Shares in accordance with the
aggregate liquidation preference of the shares of Series A
Preferred and Series B Preferred held by each of them.
(ii) If payment has been made to each holder of
Preferred Shares of the full amount to which such holder is
entitled pursuant to paragraph (d)(i) of this Article Third,
the holders of Common Stock shall then be entitled to share
ratably in the Corporation's remaining assets.
(e) Treatment of Reorganizations, Consolidations, Mergers, and
Sales of Assets. Each of (a) a consolidation or merger of the
Corporation with or into any other corporation or entity in which the
shareholders of the Corporation do not own more than 50% of the
outstanding voting power of the surviving corporation or entity
immediately after such consolidation or merger and (b) a sale of 50% or
more of the assets of the Corporation, shall be regarded as a
liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of Section (d) of this Article Third
unless the holders of a majority of the shares of the Preferred Shares
then outstanding, voting as a single class, elect not to treat any such
event as a liquidation, dissolution or winding up by giving written
notice thereof to the Corporation.
(f) Distribution Other Than Cash. Whenever the distribution
provided for in this Article Third shall be payable in property other
than cash, the value of such distribution shall be the fair market
value of such property as determined in good faith by the Board of
Directors; provided, however, that if the holders of a majority of the
then outstanding shares of Series A Preferred or a majority of the then
outstanding shares of Series B Preferred (the "Contesting Holders")
notify the Board of Directors within five business days after receiving
written notification of such determination of fair market value that
they disagree with such determination, then the Board of Directors and
the Contesting Holders shall have 30 days to agree upon a fair market
value of the relevant property. If, by the end of such 30-day period,
they are unable to agree on a fair market value, the fair market value
shall be determined by an appraisal to be paid for by the Corporation.
All appraisals shall be undertaken by two appraisers, one selected by
the Corporation and one selected by the Contesting Holders, which
selections must be made within 10 days after the expiration of the
30-day period described above. If one selecting party fails to timely
select its appraiser, the other selecting party shall select both
appraisers. The fair market value shall be the fair market value
arrived at by those appraisers within 60 days following the appointment
of the last appraiser to be appointed. In the event that the two
appraisers cannot agree on such fair market value within such a period
of time, (a) if the appraisers' valuations are within 10% of each
other, the fair market value shall be the average of the two
valuations, and (b) if the differences in the valuations are greater,
the appraisers shall elect a third appraiser who will calculate fair
market value independently, and, except as provided in the next
sentence, the fair market value of the property shall in each case be
the average of the two fair market values arrived at by the appraisers
who are closest in amount. If one appraiser's valuation is the average
of the other two valuations, the average valuation shall be the fair
market value. In the event that the two original appraisers cannot
agree upon a third appraiser within 30 days following the end of the
60-day period referred to above, the third appraiser shall be appointed
by the American Arbitration Association.
(g) Voting Power.
(i) Series A Preferred. Except as otherwise expressly
provided in Section (g) of this Article Third or as required
by law, each holder of Series A Preferred shall be entitled to
vote on all matters and shall be entitled to one vote for
every five shares of Series A Preferred standing in such
holder's name on the books of the Corporation. In addition,
each holder of Series A Preferred shall be entitled to notice
of each shareholder's meeting in accordance with the By-Laws
of the Corporation, as amended and in effect from time to
time, as if such holder were a holder of Common Stock.
(ii) Series B Preferred. Except as otherwise
expressly provided in Section (g) of this Article Third or as
required by law, no holder of Series B Preferred shall be
entitled to vote on any matter by virtue of such holder's
ownership of Series B Preferred, but such holder shall be
entitled to notice of each shareholder's meeting in accordance
with the By-Laws of the Corporation, as amended and in effect
from time to time, as if such holder were a holder of Common
Stock.
(iii) Common Stock. Except as otherwise expressly
provided in Section (g) of this Article Third or as required
by law, each holder of Common Stock shall be entitled to vote
on all matters and shall be entitled to one vote for each
share of Common Stock standing in such holder's name on the
books of the Corporation.
(iv) Record Date; Single Class. The number of shares
of Series A Preferred, Series B Preferred or Common Stock, as
the case may be, entitled to vote on any matter shall be
determined in each case as of the record date for the
determination of shareholders entitled to vote on such matter
or, if no such record date is established, at the date such
vote is taken or any written consent of shareholders is
solicited. Except as otherwise expressly provided for herein
or as required by law, the holders of Series A Preferred, the
holders of the Series B Preferred and the holders of the
Common Stock shall vote together as a single class on all
matters.
(h) Redemption.
(i) Mandatory Redemption. The Corporation shall have
the right to redeem each share of Series B Preferred then
outstanding at a price per share equal to the sum of (a) Ten
Dollars ($10.00) plus (b) an amount equal to all declared but
unpaid dividends, if any, in respect of such share (the
"Redemption Price").
(ii) Payment of Redemption Price. On the date of
redemption of the shares of Series B Preferred (the
"Redemption Date"), the Corporation will pay to each holder of
Series B Preferred an amount equal to the Redemption Price
with respect to each share of Series B Preferred held by such
holder and redeemed on such date. If on the Redemption Date
the funds of the Corporation legally available for redemption
of shares of Series B Preferred are insufficient to redeem the
number of shares of Series B Preferred to be redeemed on such
date, those funds which are legally available will be used to
redeem, at the Redemption Price, the maximum possible number
of such shares of Series B Preferred. At any time thereafter
when additional funds of the Corporation become legally
available for the redemption of Series B Preferred, such funds
will immediately be used to redeem the balance of such shares
of Series B Preferred to be redeemed (or such portion thereof
for which funds are then legally available) which the
Corporation has not so redeemed. In addition, any redemption
of Series B Preferred shall be made out of any surplus or any
capital whether or not a reduction of capital is thereby
involved, and the Corporation shall take all necessary action
to effect a reduction of capital if such reduction is
necessary to provide funds legally available for any required
redemption of Series B Preferred.
(iii) Equitable Adjustment of Redemption Price. The
Redemption Price set forth in Section (h)(i) of this Article
Third shall be subject to equitable adjustment whenever there
shall occur a stock split, combination, reclassification or
other similar event involving the Series B Preferred.
(iv) Surrender of Certificates. Not more than 50 days
and not less than 20 days prior to the Redemption Date, the
Corporation shall mail written notice (the "Redemption
Notice"), postage prepaid, to each holder of record of Series
B Preferred, at such holder's address as shown on the records
of the Corporation; provided, however, that the Corporation's
failure to give any such Redemption Notice shall in no way
affect its obligation to redeem the Series B Preferred as
provided in Section (h) of this Article Third. The Redemption
Notice to each holder of Series B Preferred shall contain the
following information:
-- the number of shares of Series B Preferred held by
such holder which shall be redeemed by the
Corporation on the Redemption Date pursuant to the
provisions of Section (g) of this Article Third;
-- the Redemption Date; and
-- the address at which the holder may surrender to
the Corporation its certificate or certificates
representing shares of Series B Preferred to be
redeemed.
Each holder of shares of Series B Preferred to be
redeemed shall surrender the certificate or certificates
representing such shares to the Corporation at the place
specified in the Redemption Notice on or prior to the
Redemption Date designated in the Redemption Notice, and
thereupon an amount equal to the Redemption Price shall be
paid to the order of the person whose name appears on such
certificate or certificates. Each surrendered certificate
shall be canceled and retired.
(v) Dividends After Redemption. From and after the
date on which the Corporation shall have paid in full the
Redemption Price with respect to any share of Series B
Preferred, such share of Series B Preferred thereby redeemed
shall not be entitled to any further dividends pursuant to
Section (c) of this Article Third.
(vi) No Reissuance of Series B Preferred. No share of
Series B Preferred acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be
reissued, and all such shares shall be canceled, retired and
eliminated from the shares which the Corporation shall be
authorized to issue. The Corporation may from time to time
take such appropriate corporate action as may be necessary to
reduce the authorized number of shares of Series B Preferred
accordingly.
(i) Conversion.
(i) Right to Convert. Each Preferred Share shall be
convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, into five shares of
fully paid and non-assessable shares of Common Stock.
(ii) Corporation's Right for Conversion. In addition,
each Preferred Share may be convertible, solely at the option
of the Corporation, into five shares of Common Stock at any
time twenty-five percent (25%) of the same Series of Preferred
Shares issued by the Corporation shall have been converted by
the holders thereof into Common Stock.
(iii) Mechanics of Conversion. Before any shares of
Preferred Shares shall be converted pursuant to Section (i)(i)
or (i)(2) of this Article Third into shares of Common Stock,
the holder thereof shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Preferred Shares,
and (a) if being converted at the election of the holder
pursuant to Section (i)(i) of this Article Third, such holder
must give written notice by mail, postage prepaid, to the
Corporation at its principal corporate office, of the election
to convert the same and shall state therein the name or names
in which the certificate or certificates for shares of Common
Stock are to be issued, or (b) if being converted
automatically pursuant to Section (i)(ii) of this Article
Third, the Corporation must give written notice by mail,
postage prepaid, to the holder at the last known address as
reflected on the Corporation's records of such conversion and
requesting the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable thereafter, issue
and deliver to such holder of Preferred Shares, or to the
nominee or nominees of such holder if so directed, a
certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately
before the close of business on the date of such surrender of
the shares of Preferred Shares to be converted, and the person
or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of
Common Stock as of such date.
(iv) Equitable Adjustment of Conversion Rate. The
conversion rate set forth in this Section (i) of this Article
Third shall be subject to equitable adjustment whenever there
shall occur a stock split, combination, reclassification or
other similar event involving the Preferred Shares.
(j) Notices of Record Date. In the event of:
(i) Any taking by the Corporation 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, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any
other right; or
(ii) any capital reorganization of the Corporation,
any reclassification or recapitalization of the capital stock
of the Corporation (other than a change in par value or from
par value to no par value or from no par value to par value or
as a result of a stock dividend or subdivision, split up or
combination of shares), any merger or consolidation of the
Corporation (other than a merger or consolidation with a
wholly-owned subsidiary in which the Corporation is the
surviving corporation), or any transfer of all or
substantially all of the assets of the Corporation to any
other corporation, or any other entity or person (other than a
wholly-owned Subsidiary); or
(iii) any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; then and in each
such event the Corporation shall mail or cause to be mailed to
each holder of Preferred Shares a notice specifying (i) the
date on which any such record is to be taken for the purpose
of such dividend, distribution or right and a description of
such dividend, distribution or right, (ii) the date on which
any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective and (iii) 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)
for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up.
Such notice shall be mailed at least 20 days prior to the date
specified in such notice on which such action is to be taken.
(j) Common Stock. Each share of Common Stock issued and
outstanding shall be identical in all respects one with the other.
Except for, and subject to, those rights expressly granted to the
holders of the Preferred Shares, or except as may be provided by the
laws of the State of Virginia, the holders of Common Stock shall have
exclusively all other rights of shareholders, including, but not by way
of limitation, (a) the right to receive dividends, when and as declared
by the Board of Directors out of assets lawfully available therefor,
and (b) in the event of any distribution of assets upon liquidation,
dissolution or winding up of the Corporation or otherwise, the right to
receive ratably and equally all the assets and funds of the Corporation
remaining after the payment to the holders of the Preferred Shares of
the specific amounts which they are entitled to receive upon such
liquidation, dissolution or winding up of the Corporation as herein
provided.
FOURTH: No holder of stock of the Corporation of any class shall have
any preemptive or preferential right to subscribe to, purchase, or receive any
shares of any class of stock of the Corporation, whether now or hereafter
authorized, or any notes, debentures, bonds, or other securities convertible
into or carrying options or warrants to purchase shares of any class of stock of
the Corporation, issued or sold or proposed to be issued or sold or with respect
to which options or warrants shall be granted, but all such shares of stock of
any class, or notes, debentures, bonds, or other securities convertible into or
carrying options or warrants to purchase shares of stock of any class, may be
issued and disposed of or sold by the Board of Directors on such terms and for
such consideration, so far as may be permitted by law, and to such person or
persons, as the Board of Directors may determine.
FIFTH: The Corporation, by resolution or resolutions of the Board of
Directors, shall have the power to create and issue, whether or not in
connection with the issue and sale of any shares of stock or any other
securities of the Corporation, warrants, rights, or options entitling the holder
thereof to purchase from the Corporation any shares of its capital stock of any
class or classes or any other securities of the Corporation, such warrants,
rights, or options to be evidenced by or in such instrument or instruments as
shall be approved by the Board of Directors. The Board of Directors is hereby
authorized to create and issue any such warrants, rights, or options from time
to time for such consideration, upon such terms, and to such persons, firm or
corporations as the board of Directors may determine.
SIXTH: The Board of Directors is authorized, subject to limitations
prescribed by law, to provide for the issuance of the authorized shares of
preferred stock in series, and by filing a certificate pursuant to the
applicable law of the State of Virginia, to establish from time to time the
number of shares to be included in each such series and the qualifications,
limitations or restrictions thereof. The authority of the board with respect to
each series includes, but is not limited to, determination of the following:
(1) The number of shares constituting that series and the
distinctive designation of that series;
(2) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment
of dividends on shares of that series;
(3) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of
such voting rights;
(4) Whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events
as the Board of Directors shall determine;
(5) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption,
including the date or date upon or after which they shall be
redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions,
and at different redemption rates;
(6) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund;
(7) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, and the relative rights of priority, if
any, of payment of shares of that series; and
(8) Any other relative rights, preferences and limitations of that
series.
SEVENTH: The number of directors which shall constitute the full Board
of Directors shall be such as from time to time shall be fixed by, or, in the
manner provided in the By-Laws, and in the absence of a By-Law fixing the number
of directors, the number shall be two (2).
EIGHTH: In furtherance and not in limitation of the powers otherwise
conferred, the Board of Directors of the Corporation is expressly authorized:
1. To exercise on behalf of the Corporation all powers held by it
except as otherwise provided herein, or by amendments hereto, or by the laws of
Virginia or by the By-Laws of the Corporation.
2. To make, amend or repeal the By-Laws of the Corporation,
including By-Laws fixing or changing the number of directors, subject however,
to the power vested in and reserved to the shareholders having general voting
power, to modify or rescind any such action by affirmative vote or written
order, direction, or consent of the holders of a majority of the outstanding
stock of the Corporation having general voting power, which power of
modification and rescission is vested in and reserved to such shareholders.
NINTH: Each director and officer (and his heirs, executors and
administrators) shall be indemnified by the Corporation against reasonable costs
and expenses incurred by him in connection with any action, suit, or proceeding
to which be may be made a party by reason of his being or having been a director
or officer of the Corporation, except in relation to any action, suits or
proceedings in which he has been adjudged liable because of negligence or
misconduct, which shall be deemed to mean willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office. In the absence of an adjudication which expressly absolves the director
or officer of liability to the Corporation or its shareholders for negligence
and misconduct, within the meaning thereof as used herein, or in the event of a
settlement each director and officer (and his heirs, executors and
administrators) shall be indemnified by the Corporation against payments made,
including reasonable costs and expenses, provided that such indemnity shall be
conditioned upon the prior determination by a resolution of two-thirds of those
members of the Board of Directors of the Corporation who are not involved in the
action, suit or proceeding that the director or officer has no liability by
reason of negligence or misconduct, within the meaning thereof as used herein,
and provided further that if a majority of the members of the Board of Directors
of the Corporation are involved in the action, suit or proceeding, such
determination shall have been made by a written opinion of independent counsel.
Amounts paid in settlement shall not exceed costs, fees, and expenses which
would have been reasonably incurred if the action, suit or proceeding had been
litigated to a conclusion. Such a determination by the Board of Directors or by
independent counsel, and the payments of amounts by the Corporation on the basis
thereof shall not prevent a shareholder from challenging such indemnification by
appropriate legal proceedings on the grounds that the person indemnified was
liable to the Corporation or its security holders by reason of negligence or
misconduct, within the meaning thereof as used herein. The foregoing rights and
indemnification shall not be exclusive of any other rights to which the officers
and directors may be entitled according to law.
Dated this ______ day of ___________, 2004.
NOXSO CORPORATION
By:
--------------------------------
Xxxxxxx X Xxxxxxxx
President & CEO
EXHIBIT 2.4(d)(i)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, ASSIGNED OR
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE ACT, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF THE ACT.
CONVERTIBLE NOTE -SERIES A PREFERRED STOCK
December __, 2003
$27,500,000.00 USD Bountiful, Utah
FOR VALUE RECEIVED, NOXSO Corporation, a Virginia corporation (the
"Borrower"), with a principal business address at 0000 Xxxxx 000 Xxxx,
Xxxxxxxxx, Xxxx 00000, hereby promises to pay to the order of Cheong Tat
Corporation (the "Lender") with a principal business address at 0000 Xxxx
Xxxxxxxx Xxxx Xxxxx 000 Xxx Xxxxx, XX 00000, or such other place as the holder
hereof shall designate, the principal amount of Twenty-Five Million Dollars
($25,000,000) or such lesser amount as may be outstanding from time to time, in
lawful money of the United States in immediately available funds and provided
that no interest shall accrue on the unpaid principal hereof from the date
hereof until June 15, 2004; thereafter, if this note has not been converted by
Borrower, a rate of Five Percent (5.0%) per annum compounded annually, shall
begin to accrue thereon. Principal plus interest accrued thereon shall be due
and payable in a single installment upon the earlier of (i) December 15, 2008,
or (ii) the occurrence of an Event of Default as defined in Section 3 hereof. In
the event of an Event of Default or after December 16, 2008, if the Lender shall
have made demand of the Note and the Borrower shall not have paid the
outstanding principal balance and accrued interest, then interest shall accrue
from and after the date of such demand at the lower of (i) Eighteen Percent
(18.0%) per annum, or (ii) the highest interest rate acceptable under applicable
usury laws, compounded monthly (the "Default Rate"). Interest shall be
calculated on the basis of actual days elapsed and a 360-day year. In the
absence of demonstrable error, the books and records of the Lender shall
constitute conclusive evidence of the unpaid principal balance hereof from time
to time.
1. Prepayment. The Borrower may at any time prepay all or part of the
principal balance of this Note without the prior written consent or notice to
the holder.
2. Conversion.
(a) The Borrower of this Note shall have the right,
exercisable at any time after the date hereof, as soon as Borrower is able so to
do, to convert the outstanding principal balance on this Note into Two Million
Seven Hundred Fifty Thousand (2,750,000) shares of the Borrower's duly
authorized Series A Preferred Stock at the rate of one share of Series A
Preferred Stock for each Ten Dollars USD ($10.00 USD) owing hereunder. In order
to exercise the foregoing conversion option, the Borrower shall present written
notice (the "Conversion Notice") to the holder of this Note, that the Borrower
elects to convert the entire principal balance of this Note into Borrower's
Series A Preferred Stock, under the terms contained herein. Upon receipt by
holder of the Conversion Notice, the holder of this Note shall tender this
original Note to Borrower, and, within ten (10) business days of receipt by
Borrower of the original Note, the holder of this Note shall receive in
exchange, a certificate or certificates for Two Million Seven Hundred Fifty
Thousand (2,750,000) shares of Borrower's Series A Preferred Stock and the
Borrower shall xxxx this Note "Paid in Full."
(b) Reservation of Shares. The Borrower, as soon as such
shares are approved and available, will at all times reserve and keep available,
solely for the purpose of issuance upon conversion of this Note as herein
provided, such number of shares of Borrower's Series A Preferred Stock as shall
then be issuable upon the conversion of this Note pursuant to the terms hereof.
The Borrower covenants that all Series A Preferred Stock which shall be so
issuable shall, upon the conversion of this Note as provided herein, be duly and
validly issued and fully paid and nonassessable by the Borrower.
3. Events of Default. The entire outstanding principal amount of, and
all accrued unpaid interest on, this Note shall become forthwith due and
payable, without presentment, demand, protest, or notice of any kind, upon the
happening of any of the following events (each, an "Event of Default"):
(a) The failure by the Borrower to make a payment, when due,
of any principal or interest due on this Note.
(b) The entry of any decree or order by a court having
jurisdiction adjudging the Borrower a debtor or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Borrower under the United States Bankruptcy
Code or any other applicable federal or state law, the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Borrower, or of any substantial part of the property of the Borrower, and
the continuance of any such decree or order unstayed, undischarged, or
undismissed and in effect for more than ninety (90) consecutive days.
(c) Institution by the Borrower of proceedings, under the
Bankruptcy Code or any other applicable federal or state law, seeking an order
for relief, or the consent of the Borrower to the institution of bankruptcy or
insolvency proceedings against the Borrower, or the consent by the Borrower to
the filing of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of or for the Borrower
or any substantial part of the property of the Borrower, or the making by the
Borrower of any assignment for the benefit of creditors, or the admission by the
Borrower of the Borrower's inability to pay its debts generally as they become
due, or the taking of any action by the Borrower in furtherance of any such
action.
(d) Any declared default of the Borrower under any other
indebtedness of the Borrower that gives the creditor a right to accelerate such
indebtedness.
Upon the occurrence of any Event of Default, the Lender may take all
actions available to it, at law or in equity, to collect and otherwise enforce
this Note.
4. Costs and Expenses of Enforcement and Collection. The Borrower will
pay on demand all costs and expenses, including reasonable attorneys' fees,
incurred or paid by the Lender in enforcing or collecting any of the obligations
of the Borrower hereunder. The Borrower agrees that all such costs and expenses
and all other expenditures by the Lender on account hereof, other than advances
of principal, which are not reimbursed by the Borrower immediately upon demand,
all amounts due under this Note after maturity, and any amounts due hereunder if
an Event of Default shall occur hereunder, shall bear interest at the Default
Rate until such expenditures are repaid or this Note and such amounts as are due
are paid to the Lender.
5. Miscellaneous.
(a) The Borrower (i) waives presentment, demand, notice of
demand, protest, notice of protest, and notice of nonpayment and any other
notice required to be given under the law to the Borrower, in connection with
the delivery, acceptance, performance, default or enforcement of this Note,
except for notice and presentment upon conversion or at maturity of this Note
and notice or proposed transfer of this Note in accordance with the terms
hereof; and (ii) agrees that any failure to act or failure to exercise any right
or remedy on the part of the registered owner shall not in any way affect or
impair the obligations of the Borrower or be construed as a waiver by the owner
of, or otherwise affect, any of its rights under this Note.
(b) No act, omission or delay by the Lender or course of
dealing between the Lender and the Borrower shall constitute a waiver of the
rights and remedies of the Lender hereunder. No single or partial waiver by the
Lender of any default or right or remedy which it may have shall operate as a
waiver of any other default, right or remedy or of the same default, right or
remedy on a future occasion.
(c) No provision hereof shall be modified, altered or limited
except by a written instrument expressly referring to this Note and to such
provision, and executed by the Borrower and the Lender.
(d) This Note shall be governed by and construed in accordance
with the laws of the State of Utah, without giving effect to the choice or
conflict of laws principles of that or any other jurisdiction.
(e) Any notice or demand which is required or provided to be
given under this Agreement shall be deemed to have been sufficiently given and
received for all purposes when delivered by hand or by telecopy, e-mail or other
method of electronic transmission (provided such transmission generates evidence
of delivery), or five days after being sent by certified or registered mail,
postage and charges prepaid, return receipt requested, or two days after being
sent by overnight delivery providing receipt of delivery, to the following
addresses:
If to Borrower:
NOXSO Corporation
Attention: Xxxxxxx Xxxxxxxx
0000 Xxxxx 000 Xxxx
Xxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxx, XX
Attention: Xxxx Xxxxxxxx
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopy (000) 000-0000
Telephone (000) 000-0000
If to Lender:
Cheong Tat Corporation
Attention: XX Xxxx
0000 Xxxx Xxxxxxxx Xxxx Xxxxx 000
Xxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Notices provided in accordance with the foregoing shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(f) In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Note shall be unreasonable or unenforceable in any respect, then such provision
shall be deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Note shall nevertheless remain
in full force and effect.
(g) This Note and all obligations evidenced hereby shall be
binding upon the successors and assigns of the Borrower and shall, together with
the rights and remedies of the Lender hereunder, inure to the benefit of the
Lender, its successors, endorsees and assigns.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
the Borrower as of the date first written above.
BORROWER:
NOXSO CORPORATION
By:
------------------------
Xxxxxxx X Xxxxxxxx
President & CEO
AGREED AND APPROVED:
LENDER:
CHEONG TAT CORPORATION
By: /s/
----------------------------------
X.X. Xxxx
President & CEO
Exhibit 2.4(d)(ii)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, ASSIGNED OR
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE ACT, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF THE ACT.
CONVERTIBLE NOTE -SERIES B PREFERRED STOCK
December __, 2003
$15,000,000.00 USD Bountiful, Utah
FOR VALUE RECEIVED, NOXSO Corporation, a Virginia corporation (the
"Borrower"), with a principal business address at 0000 Xxxxx 000 Xxxx,
Xxxxxxxxx, Xxxx 00000, hereby promises to pay to the order of Cheong Tat
Corporation (the "Lender") with a principal business address at 0000 Xxxx
Xxxxxxxx Xxxx Xxxxx 000 Xxx Xxxxx, XX 00000, or such other place as the holder
hereof shall designate, the principal amount of Fifteen Million Dollars
($15,000,000) or such lesser amount as may be outstanding from time to time, in
lawful money of the United States in immediately available funds and provided
that no interest shall accrue on the unpaid principal hereof from the date
hereof until June 15, 2004; thereafter, if this note has not been converted by
Borrower, a rate of Five Percent (5.0%) per annum compounded annually, shall
begin to accrue thereon. Principal plus interest accrued thereon shall be due
and payable in a single installment upon the earlier of (i) December 15, 2008,
or (ii) the occurrence of an Event of Default as defined in Section 3 hereof. In
the event of an Event of Default or after December 16, 2008, if the Lender shall
have made demand of the Note and the Borrower shall not have paid the
outstanding principal balance and accrued interest, then interest shall accrue
from and after the date of such demand at the lower of (i) Eighteen Percent
(18.0%) per annum, or (ii) the highest interest rate acceptable under applicable
usury laws, compounded monthly (the "Default Rate"). Interest shall be
calculated on the basis of actual days elapsed and a 360-day year. In the
absence of demonstrable error, the books and records of the Lender shall
constitute conclusive evidence of the unpaid principal balance hereof from time
to time.
1. Prepayment. The Borrower may at any time prepay all or part of the
principal balance of this Note without the prior written consent or notice to
the holder.
2. Conversion.
(a) The Borrower of this Note shall have the right,
exercisable at any time after the date hereof, as soon as Borrower is able so to
do, to convert the outstanding principal balance on this Note into One Million
Five Hundred Thousand (1,500,000) shares of the Borrower's duly authorized
Series B Preferred Stock at the rate of one share of Series B Preferred Stock
for each Ten Dollars USD ($10.00 USD) owing hereunder. In order to exercise the
foregoing conversion option, the Borrower shall present written notice (the
"Conversion Notice") to the holder of this Note, that the Borrower elects to
convert this entire principal balance of this Note into Borrower's Series B
Preferred Stock, under the terms contained herein. Upon receipt by holder of the
Conversion Notice, the holder of this Note shall tender this original Note to
Borrower, and, within ten (10) business days of receipt by Borrower of the
original Note, the holder of this Note shall receive in exchange, a certificate
or certificates for One Million Five Hundred Thousand (1,500,000) shares of
Borrower's Series B Preferred Stock and the Borrower shall xxxx this Note "Paid
in Full."
(b) Reservation of Shares. The Borrower, as soon as such
shares are approved and available, will at all times reserve and keep available,
solely for the purpose of issuance upon conversion of this Note as herein
provided, such number of shares of Borrower's Series B Preferred Stock as shall
then be issuable upon the conversion of this Note pursuant to the terms hereof.
The Borrower covenants that all Series B Preferred Stock which shall be so
issuable shall, upon the conversion of this Note as provided herein, be duly and
validly issued and fully paid and nonassessable by the Borrower.
3. Events of Default. The entire outstanding principal amount of, and
all accrued unpaid interest on, this Note shall become forthwith due and
payable, without presentment, demand, protest, or notice of any kind, upon the
happening of any of the following events (each, an "Event of Default"):
(a) The failure by the Borrower to make a payment, when due,
of any principal or interest due on this Note.
(b) The entry of any decree or order by a court having
jurisdiction adjudging the Borrower a debtor or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Borrower under the United States Bankruptcy
Code or any other applicable federal or state law, the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Borrower, or of any substantial part of the property of the Borrower, and
the continuance of any such decree or order unstayed, undischarged, or
undismissed and in effect for more than ninety (90) consecutive days.
(c) Institution by the Borrower of proceedings, under the
Bankruptcy Code or any other applicable federal or state law, seeking an order
for relief, or the consent of the Borrower to the institution of bankruptcy or
insolvency proceedings against the Borrower, or the consent by the Borrower to
the filing of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of or for the Borrower
or any substantial part of the property of the Borrower, or the making by the
Borrower of any assignment for the benefit of creditors, or the admission by the
Borrower of the Borrower's inability to pay its debts generally as they become
due, or the taking of any action by the Borrower in furtherance of any such
action.
(d) Any declared default of the Borrower under any other
indebtedness of the Borrower that gives the creditor a right to accelerate such
indebtedness.
Upon the occurrence of any Event of Default, the Lender may take all
actions available to it, at law or in equity, to collect and otherwise enforce
this Note.
4. Costs and Expenses of Enforcement and Collection. The Borrower will
pay on demand all costs and expenses, including reasonable attorneys' fees,
incurred or paid by the Lender in enforcing or collecting any of the obligations
of the Borrower hereunder. The Borrower agrees that all such costs and expenses
and all other expenditures by the Lender on account hereof, other than advances
of principal, which are not reimbursed by the Borrower immediately upon demand,
all amounts due under this Note after maturity, and any amounts due hereunder if
an Event of Default shall occur hereunder, shall bear interest at the Default
Rate until such expenditures are repaid or this Note and such amounts as are due
are paid to the Lender.
5. Miscellaneous.
(a) The Borrower (i) waives presentment, demand, notice of
demand, protest, notice of protest, and notice of nonpayment and any other
notice required to be given under the law to the Borrower, in connection with
the delivery, acceptance, performance, default or enforcement of this Note,
except for notice and presentment upon conversion or at maturity of this Note
and notice or proposed transfer of this Note in accordance with the terms
hereof; and (ii) agrees that any failure to act or failure to exercise any right
or remedy on the part of the registered owner shall not in any way affect or
impair the obligations of the Borrower or be construed as a waiver by the owner
of, or otherwise affect, any of its rights under this Note.
(b) No act, omission or delay by the Lender or course of
dealing between the Lender and the Borrower shall constitute a waiver of the
rights and remedies of the Lender hereunder. No single or partial waiver by the
Lender of any default or right or remedy which it may have shall operate as a
waiver of any other default, right or remedy or of the same default, right or
remedy on a future occasion.
(c) No provision hereof shall be modified, altered or limited
except by a written instrument expressly referring to this Note and to such
provision, and executed by the Borrower and the Lender.
(d) This Note shall be governed by and construed in accordance
with the laws of the State of Utah, without giving effect to the choice or
conflict of laws principles of that or any other jurisdiction.
(e) Any notice or demand which is required or provided to be
given under this Agreement shall be deemed to have been sufficiently given and
received for all purposes when delivered by hand or by telecopy, e-mail or other
method of electronic transmission (provided such transmission generates evidence
of delivery), or five days after being sent by certified or registered mail,
postage and charges prepaid, return receipt requested, or two days after being
sent by overnight delivery providing receipt of delivery, to the following
addresses:
If to Borrower:
NOXSO Corporation
Attention: Xxxxxxx Xxxxxxxx
0000 Xxxxx 000 Xxxx
Xxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxx, XX
Attention: Xxxx Xxxxxxxx
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopy (000) 000-0000
Telephone (000) 000-0000
If to Lender:
Cheong Tat Corporation
Attention: XX Xxxx
0000 Xxxx Xxxxxxxx Xxxx Xxxxx 000
Xxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Notices provided in accordance with the foregoing shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(f) In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Note shall be unreasonable or unenforceable in any respect, then such provision
shall be deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Note shall nevertheless remain
in full force and effect.
(g) This Note and all obligations evidenced hereby shall be
binding upon the successors and assigns of the Borrower and shall, together with
the rights and remedies of the Lender hereunder, inure to the benefit of the
Lender, its successors, endorsees and assigns.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
the Borrower as of the date first written above.
BORROWER:
NOXSO CORPORATION
By:
------------------------
Xxxxxxx X Xxxxxxxx
President & CEO
AGREED AND APPROVED:
LENDER:
CHEONG TAT CORPORATION
By: /s/
-----------------------------
X.X. Xxxx
President & CEO
