EXHIBIT 10.1
CAPRIUS, INC.
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SECURED PROMISSORY NOTE
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$_______________ Xxxxx 0, 0000
(Xxxxxxxxx Xxxxxx)
CAPRIUS, INC., a Delaware corporation (herein called the "Company", which
term shall also include its successors and assigns), for value received, hereby
promises to pay to ____________________ or permitted assigns (the "Holder") on
February 28, 2002, the principal sum of
____________________________________Dollars ($___________), with interest
payable at maturity at the rate of eleven (11%) percent per annum accruing from
the date hereof on the outstanding principal amount until the entire principal
shall become paid or otherwise satisfied, and subject to voluntary prepayment,
both principal and interest to be payable at the principal office of the Company
at Xxx Xxxxxx Xxxxx, Xxxx Xxx, Xxx Xxxxxx 00000, or at such other location as
the Company and the Holder may agree upon in writing.
This Note is one of a duly authorized issue of Notes of the Company to
limited in aggregate principal to $300,000.
This Note is issued with a detachable common stock purchase warrant
evidencing the right initially to purchase one share of Common Stock of the
Company for each $1.00 initial principal amount of this Note, at an initial
exercise price of Eight Cents ($0.08) per share (the "Warrant").
1. DEFINITION OF TERMS
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For purposes of this Note, unless the context otherwise requires:
1.1 Bridge Notes. Bridge Notes shall mean, collectively, the Notes of
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a duly authorized issue of notes of the Company limited in aggregate principal
amount to $300,000, maturing on February 28, 2002.
1.2 Business Day. Business Day shall mean a day other than a Saturday,
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Sunday or a day when banking institutions in New York City are authorized by
law, regulation or order to remain closed.
1.3 Holder of Record. Holder of Record shall mean in connection with
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any Note the payee thereof unless a subsequent holder shall have presented to
the Company such Note, duly assigned to him and delivered to the Company a
written notice of his acquisition of the Note and designated in writing an
address to which payments and notices in respect of the Note shall be mailed, in
which case the term shall mean such subsequent holder.
1.4 Maturity. As used herein the terms "maturity" and "Maturity" shall
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mean February 28, 2002 or such earlier or later date on which the principal
amount of this Note becomes payable hereunder.
1.5 Common Stock. Common Stock shall mean the Company's Common Stock,
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$0.01 par value, or such securities in which the Common Stock may be exchanged.
1.6 Person. Person shall mean any individual, corporation,
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partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
2. SECURITY
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2.1 Security Agreement. Caprius will grant to the Holder a joint
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security interest with the holders of the other outstanding Notes in the
inventory, receivables and non-leased equipment of the Strax Division of the
Company. Such security interest shall be pursuant to the terms of a Security
Agreement to be executed among the initial holders of the Notes and the Company
and shall become effective as of this date. The Company will not grant a
security interest to a third party in the assets of the Strax Division, except
(i) in connection with a transaction in which the net proceeds will be used to
prepay all of the then outstanding principal and accrued interest on the Notes
pursuant to Section 3.3 hereof or (ii) in connection with an installment
purchase or a capitalized lease of equipment.
3. PREPAYMENT OF NOTE
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3.1 Note to Be Callable for Prepayment. The Company shall have the
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right, subject to compliance with the provisions of this Article 3, to call this
Note for prepayment at any time (herein referred to as the "Prepayment Date"),
either in whole or in part, at the principal amount so to be prepaid, together
with accrued interest thereon to the Prepayment Date.
3.2 Notice of Call for Prepayment. Notice of call for prepayment of
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this Note or any portion hereof shall be given to the Holder of Record at his
address in accordance with Section 7.2 hereof at least three (3) Business Days
prior to the Prepayment Date. Upon notice of call for prepayment being given as
aforesaid, the Company shall prepay on the Prepayment Date the entire principal
amount of this Note or the portion hereof, as the case may be, so called for
prepayment as hereinabove provided, and shall pay all accrued and unpaid
interest on the principal amount being prepaid.
3.3 Sale of the Strax Division. (a) If the Company shall sell or
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otherwise dispose of the Strax Division (the "Strax Sale") prior to the Maturity
of this Note, the Company shall apply the net cash proceeds of such Sale (after
payment of all commissions, expenses and taxes related to such Sale) toward
prepayment of the Notes.
(b) The Company shall effect the prepayment required by this Section
within ten (10) Business Days after its receipt of the net cash proceeds from
the Strax Sale. If less than the entire principal amount of the Notes at the
time outstanding shall be called for prepayment, upon the Strax Sale in
accordance with Section 3.3(b) hereof, the Company shall allocate the principal
amount so called for prepayment among the Notes in proportion, as nearly as may
be, to the aggregate principal amount of Notes then held by the respective
holders thereof. In any such allocation (i) the Company may, according to such
method as it shall deem proper in its discretion, make such adjustments by
increasing or decreasing by not more than $1,000 the amount which would be
allocable on the basis of exact proportion to any holders, as may be necessary
to the end that the principal amount so allocated shall be in each instance an
integral multiple of $1,000 and (ii) the Company shall not be required to
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allocate any amount to any holder to which the amount allocable on the basis of
the exact proportion would be less than $1,000.
3.4 Prepayment of Portion of Note. Upon any prepayment of a portion of
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the principal amount of this Note, the Holder, at his option, (i) may require
the Company to execute and deliver at the expense of the Company a new Note
dated as of the date to which interest on this Note has been paid, and payable
to such person or persons as may be designated by the Holder, for the aggregate
principal amount of this Note then remaining unpaid, upon surrender of this Note
and payment of applicable transfer taxes, if any, or (ii) may present this Note
to the Company for notation hereon of the payment of the portion of the
principal amount of this Note so prepaid.
4. COVENANTS OF THE COMPANY
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The Company agrees, and covenants that until such time as this Note has
been paid in full the Company will comply with the following covenants:
4.1 Payment of Principal and Interest. The Company will duly and
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punctually pay the principal of and interest on this Note in accordance with the
terms of this Note.
4.2 Maintenance of Office or Agency. The Company will maintain an
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office in the State of New Jersey where this Note may be presented or
surrendered for payment, where this Note may be surrendered for transfer or
exchange and where notices and demands to or upon the Company in respect of this
Note may be served. The Company will give prompt written notice to the Holder of
the location, and of any change in the location, of such office.
4.3 Corporate Existence. The Company will do or cause to be done all
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things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchise; provided, however, that
the Company shall not be required to preserve any right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holder.
4.4 Consolidation, Merger, Conveyance or Transfer. The Company shall
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not consolidate with or merge into any other corporation or convey or transfer
its properties and assets substantially as an entirety to any Person (excluding
a sale of the Strax Division), unless:
(a) the corporation formed by such consolidation into which the
Company is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Company substantially as an entirety shall be a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia, and shall expressly assume the
due and punctual payment of the principal of and interest on all the Notes; and
(b) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing.
4.5 Corporate Existence. The Company shall send to each Holder a copy
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of all financial statements and pother reports it sends to the holders of its
Common Stock.
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4.6 Financial Statements. The Company shall send to each Holder a copy
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of all financial statements and reports it sends to the holders of its Common
Stock.
5. REMEDIES
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5.1 Events of Default. "Event of Default", wherever used herein means
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any one of the following events (whatever the reason for such Event of Default
and whether it shall be effected by operation of law pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of principal or any installment of interest
upon this Note for a period of five (5) Business Days after it becomes due
and payable whether at its Maturity or otherwise; or
(2) default in the performance, or breach, of any covenant of the Company
in this Note (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with), or, after its effectiveness, under the Security Agreement; or
(3) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under the Federal Bankruptcy
Code or any other applicable Federal or State law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of sixty
(60) consecutive days; or
(4) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable Federal or State law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(5) the Company shall have entered against it a final judgment by a court
having jurisdiction which, if satisfied, would have a material adverse
effect on the financial condition of the Company;
then and in each and every case, unless the principal and accrued interest on
this Note shall have already become due and payable, the Holder may by notice in
writing to the Company declare the unpaid balance of this Note to be forthwith
due and payable, and thereupon such balance, including the principal of this
Note and accrued interest thereon, shall become so due and payable without
presentation, protest or further demand or notice of any kind, all of which are
hereby expressly waived.
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5.2 Enforcement of Remedies. In case any one or more of the Events of
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Default specified in Section 5.1 hereof shall have occurred and be continuing,
the Holder may proceed to protect and enforce his rights either by suit in
equity or by action at law, for the specific performance of any covenant or
provision contained herein, or proceed to enforce payment of this Note or to
enforce any other legal or equitable right of the Holder of this Note; and under
the Security Agreement if it is then in effect.
5.3 Waiver by Company. To the extent permitted by applicable law, the
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Company hereby agrees to waive, and does hereby absolutely and irrevocably waive
and relinquish the benefit and advantage of any valuation, stay, appraisement,
extension or redemption laws now existing or which may hereafter exist, which,
but for this provision might be applicable to any sale made under the judgment,
order or decree of any court or otherwise, based on this Note or any claim for
interest on this Note or any foreclosure thereunder.
5.4 Amendments and Waivers. No course of dealing between the Company
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and the Holder of this Note and no delay on the part of the Holder in exercising
any rights hereunder shall operate as a waiver of the rights of the Holder. No
covenant or other provision of this Note nor any default or Event of Default in
connection therewith may be waived otherwise than by a written instrument signed
by the Holder. Any provision of this Note to the contrary notwithstanding,
changes in or additions to this Note may be made, and compliance with any term,
convenant, condition or provision set forth in this Note may be omitted or
waived (either generally or in a particular instance and either retroactively or
prospectively), provided a similar change or addition is made in the remaining
outstanding Xxxxxx/Xxxx Notes, and any default or Event of Default and the
consequences thereof may be waived.
5.5 Cost and Expense of Collection. The Company covenants and agrees
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that if default be made in any payment or prepayment of principal of, or
interest on, the Notes, it will, to the extent permitted under applicable law,
pay to the Holder such further amount as shall be sufficient to cover the cost
or expense of collection, including reasonable compensation to the attorneys of
the Holder for all services rendered in that connection.
6. PAYMENT; EXCHANGE AND TRANSFER; LOST NOTES
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6.1 Payments. Interest and principal to be paid in respect of this
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Note shall be paid at the place provided herein, without any presentment or
notation of payment, and the amount of principal so paid on this Note shall be
regarded as having been retired and cancelled at the time of payment. The Holder
of Record shall, however, at the place of payment of this Note at any time
during its regular business hours on any day when a payment of principal is due,
permit the Company to make appropriate notation hereon of the amount of
principal which has been paid on this Note. The Holder of Record, before any
transfer hereof, shall make a notation hereon of all principal payments
theretofore made hereon, and shall in writing notify the Company of the name and
address of the respect to which interest and transferee.
6.2 Exchange and Transfer. The Holder of Record of this Note may,
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prior to maturity or prepayment thereof, surrender the Note held by him for
exchange, at the office designated by the Company pursuant to Section 3.2
hereof. Within a reasonable time thereafter and without expense (other than
transfer taxes, if any) to such Holder of Record, the Company shall issue in
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exchange thereof, or in exchange for the portion thereof not surrendered in
payment as aforesaid (as the case may be), in such denominations and made
payable to such person or persons, or order, as such Holder of Record shall
designate, a Note or Notes for the same aggregate principal amount as the unpaid
principal amount of the Note or Notes so surrendered, having the same maturity
and rate of interest, containing the same provisions and subject to the same
terms and conditions as the Note or Notes as surrendered.
6.3 Lost, etc., Notes. Upon receipt by the Company of evidence
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satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in case of loss, theft or destruction) of indemnity satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Note, if mutilated, the Company will
make and deliver a new Note of like tenor in lieu of such Note.
7. MISCELLANEOUS PROVISIONS
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7.1 Benefits. This Note shall be binding upon the Company and its
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successors and assigns and shall inure to the benefit of the Holder and his
heirs and administrators, provided that the Holder may transfer all or part of
the unpaid principal amount of this Note to a member of his immediate family or
to a trust of which the Holder or a member of his immediate family is the
beneficiary.
7.2 Addresses of Parties. All communications provided for herein or
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with reference to this Note shall be deemed to have been sufficiently given or
served for all purposes if sent by certified or registered mail, postage and
purposes if sent by certified or registered mail, postage and charges prepaid,
to the following addresses: if to the Company, at its office, 0 Xxxxxx Xxxxx,
Xxxx Xxx, Xxx Xxxxxx 00000, Attention: President, or at any other address
designated by the Company in writing to the Holder of Record of this Note; and
if to any Holder of Record of the Note, as specified in writing to the Company
by an initial or successor Holder of Record.
7.3 Governing Law. This Note shall be deemed to be a contract made
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under, and to be construed in accordance with, the laws of the State of New
Jersey, without giving effect to conflicts of law.
7.4 Section Headings. The descriptive section headings herein have
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been inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
corporate name by its President, under its corporate seal, attested by its
Secretary, and dated the day and year first above written.
CAPRIUS, INC.
By: s/Xxxxxx Xxxxx
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Xxxxxx Xxxxx, President & CEO
ATTEST:
s/Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx, Secretary
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