FIRST AMENDMENT TO SECURED CONVERTIBLE NOTES
Exhibit
99.1
FIRST
AMENDMENT TO
This FIRST AMENDMENT TO SECURED
CONVERTIBLE NOTES (this “Amendment”), dated as
of April 22, 2009, is entered into by and among VeruTEK Technologies, Inc., a
Nevada corporation (the “Company”), and the
other undersigned parties hereto (the “Amending
Noteholders”), and amends those certain Secured Convertible Notes issued
by the Company on May 9, 2007 with an aggregate principal amount of $1,685,000
(the “Original
Notes”). Capitalized terms used herein without definition
shall have the meanings for such terms set forth in the Original
Notes.
WHEREAS,
the Company and the Amending Noteholders desire to amend the Original Notes to
provide the holders of such Original Notes (the “Holders”) certain
options that may be exercised prior to the maturity of such Original Notes and
to make certain other amendments to the Original Notes; and
WHEREAS,
Original Notes with an aggregate principal amount of $1,635,000 are outstanding
as of the date hereof.
NOW,
THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Amending Noteholders hereby agree as
follows:
1. The
Company and the Amending Noteholders, constituting Holders representing at least
662/3% of the
aggregate principal amount of the Original Notes outstanding as of the date
hereof, pursuant to Section 14 of the Original Notes, hereby amend the Original
Notes as set forth in this Amendment.
2. The
Original Notes are hereby amended to provide that, if a Holder so notifies the
Company in writing prior to 5:00 p.m., Eastern time, on May 8, 2009, such Holder
may elect, and thereafter shall be bound by, one of the following three
options:
Option 1
- If Option 1 is selected, (a) the base interest rate set forth in
the first sentence of Section 2 of the Original Notes shall be increased from 6%
per annum to 8% per annum and (b) instead of being payable in full on May 9,
2009, the outstanding principal amount of the Holder’s Original Note shall be
paid in 24 equal monthly installments beginning on May 9,
2009. Accrued interest on the outstanding principal amount shall
continue to be paid by the Company in accordance with Section 2 of the Original
Notes, provided that the Maturity Date shall be deemed to be April 9,
2011.
Option 2
- If Option 2 is selected, and the Holder properly converts such
Holder’s Original Note into Common Stock in full prior to May 9, 2009 in
accordance with the terms of the Original Note, the Conversion Price to be used
to calculate the number of shares of Common Stock to be issued upon conversion
shall be decreased from $1.00 to $0.40.
Option
3 - If Option 3 is selected, (a) the Company shall pay to the Holder
20% of the outstanding principal amount of the Holder’s Original Note on May 9,
2009, (b) the Company shall pay to the Holder the remaining 80% of the
outstanding principal amount of the Holder’s Original Note in 16 equal monthly
installments beginning on May 9, 2010 and (c) the Conversion Price to be used to
calculate the number of shares of Common Stock to be issued if the Holder
converts the then-outstanding principal amount of such Holder’s Original Note
into Common Stock in accordance with the terms of the Original Note shall be
decreased from $1.00 to $0.80. Accrued interest on the outstanding
principal amount shall continue to be paid by the Company in accordance with
Section 2 of the Original Notes, provided that the Maturity Date shall be deemed
to be August 9, 2011.
1
A
Holder’s Original Note shall be deemed to be further amended to the extent
necessary to effect the intent of any option that such Holder
elects.
3. The
last sentence of Section 1 of each of the Original Notes is hereby deleted in
its entirety and the following sentence is inserted in lieu
thereof:
“The
Company may prepay any portion of the outstanding Principal, accrued and unpaid
Interest or accrued and unpaid Late Charges, if any, on Principal and
Interest.”
4. Sections
4(a)(i) and (ii) of each of the Original Notes are hereby deleted in their
entirety and the following Sections 4(a)(i) and (ii) are inserted in lieu
thereof:
“(i) Intentionally
omitted.
(ii) Intentionally
omitted.”
5. The
failure to comply with the covenants contained in Sections 4.6, 4.18 and 4.19 of
the Securities Purchase Agreement, dated as of May 9, 2007, pursuant to which
the Original Notes were purchased, shall not be deemed to be an Event of Default
pursuant to Section 4(a) of the Original Notes. In addition, the
failure to comply with any covenant or agreement in any of the Transaction
Documents or any other agreement between the Company and the Holders that has a
subject matter substantially similar to the subject matter of Sections 4(a)(i)
or (ii) of the Original Notes or Sections 4.6, 4.18 or 4.19 of the Securities
Purchase Agreement shall not be deemed to be an Event of Default pursuant to
Section 4(a) of the Original Notes.
6. Section
7(a) of each of the Original Notes is hereby deleted in its entirety and the
following Section 7(a) is inserted in lieu thereof:
“(a) Intentionally
omitted.”
7. Section
7(c) of each of the Original Notes is hereby amended to delete the parenthetical
clause contained therein.
8. This
Amendment shall be governed by and construed in accordance with the internal
laws of the State of New York (without reference to the conflicts of law
provisions thereof).
9. Except
as expressly provided in this Amendment, all of the terms and provisions of the
Original Notes shall remain in full force and effect and all references to the
Original Notes shall hereinafter be deemed to be references to the Original
Notes, as amended by this Amendment.
10. This
Amendment may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which shall constitute one and the same
document. This Amendment may be executed by facsimile
signatures.
[Remainder
of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto
have executed this Amendment as of the date first written above.
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| President and Chief Executive Officer | |||
Signature
Page to First Amendment to Secured Convertible Notes
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NOB
HILL CAPITAL PARTNERS, L.P.
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, | |
| its General Partner | |||
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| Name | |||
| Title: GP | |||
| Aggregate Principal Amount | |||
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of
Original Notes Held: $540,000
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Signature Page to First Amendment to
Secured Convertible Notes
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MEADOWBROOK
OPPORTUNITY FUND, LLC
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: Manager | |||
| Aggregate Principal Amount | |||
| of Original Notes Held: $500,000 | |||
Signature Page to First Amendment to
Secured Convertible Notes
5
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REDWOOD
INVESTMENT CAPITAL, LP
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, | |
| its General Partner | |||
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By:
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/s/ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: Pres. | |||
| Aggregate Principal Amount | |||
| of Original Notes Held: $100,000 | |||
Signature Page to First Amendment to Secured Convertible
Notes
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |||
| Aggregate Principal Amount | |||
| of Original Notes Held: $25,000 | |||
Signature Page to First Amendment to Secured Convertible
Notes
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